LAGOS, Nigeria — The Nigerian economy thrives off business expansion. In the past, countries such as America and the United Kingdom have hesitated to conduct business with Africa due to a fraudulent history.
With middle and high social classes on the rise, Paypal is teaming up with young startup company MallforAfrica. The goal is to make online payments optional for the African market and safer for Kenyan consumers.
Entrepreneurs need to grow and ensure market value.
M-Pesa, the mobile app with 20 million users (which is half the population of Kenya), employs 80,000 agents. Even this mobile payment system is not safe from scams but is the most reliable and quickest option.
This mobile app is too effective to drop.
Users outnumber the amount of those who have a standard bank account in at least nine African countries. According to Ipsos, of the 26 million Internet users in Kenya about 60 percent of them shop online. It is even effective for those who are illiterate, which is the baseline non-discriminatory outreach mission of M-Pesa.
M-Pesa only needs proper identification for one to create an account.
People use this system to save time when paying fees for electricity, utilities, school and groceries. Many rural communities and those in poverty rely on their phones to finalize transactions between companies like M-Kopa, which provides solar energy to thousands of people living in areas considered to be off the grid.
This is to say even rural communities could use MallforAfrica. The site makes products from other countries more readily available and safer to exchange in Nigeria. Using the e-commerce MallforAfrica website, an entrepreneur was able to purchase a sewing machine for her business. Doctors are purchasing medical equipment to provide schools with supplies.
This year, customers in Kenya and Ghana began successful transactions through the site. Customers can place orders and pay them through MallforAfrica’s mobile app. The company finalizes the transactions for the customers and sends the products to their home or a depot.
MallforAfrica secured 60 jobs since it was founded in 2013 by Chris and Tope Folayan, two Nigerian brothers who attended college in the U.S. The Nigerian technology enterprise is on the rise with investors like Silican Valley’s EchoVC Partners and British Helios Investment partners. Both of these companies invested in MallforAfrica in the early developmental stages.
“When you go into a store, you might only find three colors of Ralph Lauren Polo shirts in three sizes,” Chris Folayan said. A strong believer that stores do not sell enough foreign goods. Stores from America often refuse to conduct business with Africa.
Folayan used to pack his bags full of goods requested by his family during his visits to Silicon Valley. The company is selling products from over 120 online retail companies such as Amazon, Barneys, Bloomingdale’s, and J. Crew. Other vendors also include Macy’s, Children’s Place, Bebe, Carter’s, Juicy Couture, Zappos, and Perfume Junkie.
The company sends about four and a half tons of merchandise to Africa every week. In 2014, annual sales production settled between $15 million and $20 million.
Paypal reaches out to MallforAfrica to provide safer purchasing options, which expands the business beyond Nigeria.
Paypal’s operations mimic M-Pesa in that e-mail addresses and passwords are all that is necessary to create an account. This payment option holds a quarter of today’s cross-border trade payment volume.
Paypal’s reports on the six largest world markets indicate that today’s merchants rely on customers shopping abroad via the web. A flow of $105 billion would have been spent this year by 94 million average consumers using overseas websites.
The report suspects that by 2018, this amount will increase by nearly 200 percent with 130 million shoppers using online stores. Africa was not included in the survey, but the United States was found to be the most popular market.
Giving Kenya the safer option to evaluate and conduct business within the U.S. market will increase the demand for U.S. goods.
MallforAfrica plans to expand further and even outside the continent.
– Katie Groe