Lack of bandwidth is not the only factor holding back the development of e-commerce and online business in Africa. It also needs a much more developed financial infrastructure.
This is according to Dieter Febel, MD of leading ISP, SA Gateway, sister company of Esquire Technologies, one of the leading distributors in southern Africa of IT, mobility, digital and lifestyle products.
“Bandwidth has certainly been a problem, but it is not as parlous these days. But to build e-commerce, and really enable it, you need to have the complete ecosystem in place – one that can allow the processing of on-line payments,” said Febel. “This means you need banks that can handle debit and credit card payments.
Additionally, the general population would need to have access to, and use, credit and debit cards – otherwise e-commerce will not grow wings.”
Naturally, banks play a pivotal part in the complex ecosystem that is required. In Africa, banks need to speed up the rate at which they are rolling out cards for the populace.
This is likely to improve but, right now, a small percentage of Africans have access to credit and debit cards.
“The growth is likely to revolve around debit cards as opposed to credit cards as Africans don’t have much experience working with credit cards – and they carry more risk for banks. So the growth will come from debit cards,” said Febel.
What the continent also requires is a group of banks that are prepared to venture into this market and are prepared to accept online payments on behalf of their merchant customers.
But the e-commerce industry in Africa remains putative.
Banks need to take the risk of investing in new technologies – and an acquiring bank who wants to get into e-commerce will need to buy the appropriate licences from the card associations like Visa and Mastercard. Then they will have to develop and install card processing systems, hire skilled staff to manage those systems and be acutely aware of fraud – and understand and manage the risk of being exposed to fraud.