Like the headline says, this post is a throwback from 2013 (so keep the time reference in mind) when I spent quite a bit of time barking at the Nigerian payments moon. It is now 2015, and things don’t seem to have changed significantly. Or have they? As I write this, I’m on my way to the “grand reveal” of what is supposed to be a revolutionary digital payments innovation from Verve. We’ll see. But read this first.

When Deezer became available in Nigeria last October, I was one of the first to signup. After the 15 day trial period expired, I decided I liked the experience enough to continue “testing” it with a premium subscription. It cost just $2.49/month, so I put in my credit card details and put my headphones back over my ears.

I had a vague sense in the back of my mind that I needed to turn it off if I didn’t want to be billed the next month. But somehow, I never quite got around to it. When the bank finally notified me that $2.49 had left my account, I was mildly surprised. But guess what? I didn’t really mind. I was like, “yeah? okay.” It’s not a lot of money…and there’s no harm in enjoying all the music I can stream for another month, is there?

Now let me tell you another story. A few weeks ago, I stumbled on my now abandoned Spinlet app, and a twinge of guilt made me load it up again, just to see what was going on. When I tried to play some of the music that I’d downloaded previously, the app announced that my subscription had expired. I would need to re-subscribe.

I promptly exited the app, and that was that.

That incident, together with how my Deezer subscription automagically renewed itself that first time has made me understand the role that online payments infrastructure plays in the psychology behind taking people’s money. I’ll explain my thinking.

Our foreign businesses and startup counterparts have many advantages. But the advantage in payments is particularly crushing. Because the infrastructure and regulatory framework around their payments allows merchants keep credit card information for future use, they can practically keep their hands in their customers’ pockets. They can take their money every time it is due without —

  1. bothering the user and risking a change of mind.
  1. interrupting the service, which could annoy the user and lead to a cancellation.

The problem with having to directly ask a customer for their money every single time is that every single time, you also trip a psychological trigger that makes them stop and ask themselves — “why the hell do I pay for this anyway?”. They might think it is worth their money, and pay…but there’s also a good chance that the evaluation might not resolve itself in your favour.

Happily for startups abroad, their payments infrastructure makes it easy to mitigate that risk by reducing the friction in the process to the barest minimum. If you’ve previously bought something on a site, all you need to do is click “checkout”, and you’re done. If it’s a subscription, your subscription renews automagically until you cancel.

In comparison, online payments in Nigeria is an absolute clusterfuck. I mean total jagbajantis. Acquiring the means to collect people’s money in the first place is a tale of woe and sorrow. And even when you manage to integrate payments into your product/platform, the customer has to bring out their credit card every single time they want to give you money. It’s so much work for the customer that a good number of them will invariably fall off at that point. Not because they don’t like the service. Not because they can’t afford it. But because it’s just so f**ing hard to pay.

Like most foreign startups, Deezer only has to worry about scoring that first crucial conversion. After that, they’re mostly home free. They simply devote their energies to making the subscriber happy enough that they don’t consider cancelling. But a startup here has to convert in January, February, March…basically everytime he has to ask for his money. As if there aren’t enough things a Nigerian startup has to worry about, they also have to worry about customer attrition at the point of sale. The only reason why I don’t use Spinlet is because the very act of paying is an irritating chore. How sad is that?

There’s a lot I don’t understand about Nigerian electronic payments. So far, asking the players involved only leads to more confusion. You’ll likely get sucked into their negativity distortion field — the stale run around about how the regulatory framework isn’t adequate, or how the CBN isn’t co-operating. It’s not like a more sensible way to do this online payments thing hasn’t been invented —  somehow we seem intent on savoring the economic masochism of the way we’re currently doing it.  While we’re all busy blowing grammar here, Nigerian startups  are dying simply because they can’t efficiently accept money from otherwise willing customers. They can’t accept money.

On the 14th of this month, Deezer will dip their hands into my wallet and make off with another $2.49. And I will like it. Spinlet, on the other hand, isn’t likely to get another cent out of me anytime soon. It’s not their fault. But it isn’t mine either. If someone knows what bodmas we can use to solve the jagbajantis of online payments in Nigeria, they should kindly share with the rest of the class.

Post Script: A number of exciting things are happening in Nigerian payments, which we will be exploring in subsequent posts, and is in fact the focus of December’s Africabeta event (have you registered to attend? It’s free).

Between Pay With Capture, Paystack, Konga Pay, WeChat Wallet and more, I daresay that 2016 will be the year when we un-fuck payments?

Bankole Oluwafemi Author

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