A headache for Ivorian e-merchants

The e-commerce market is booming in Côte d’Ivoire, the leading economy in French-speaking Africa. With a current value of around 46 million euros, it should grow further in the years to come alongside the population. However, e-tailers face a host of systemic challenges, ranging from high transfer fees to restrictions on global online payment platforms such as PayPal.

Vanessa runs a business from her home in Bouaké, one of the largest cities in Ivory Coast, and has been selling her cocoa butter and shea butter cosmetics online for almost 10 years. She is financially dependent on this business and loses a large part of her profits due to transaction costs.

“In Côte d’Ivoire, customers do not have a bank card. They pay through Orange Money, Wave, MTN and other phone payment apps – but they also have to pay fees. It can quickly get expensive, ”she laments. “For customers abroad, it’s even worse. They actually have to go to a Western Union, Ria, or MoneyGram branch to send the money, and the fees can be up to 2%.” These additional costs often discourage customers and, ultimately, reduce turnover.

Kader Diaby, who sells clothes made from organic materials, faces the same problems. His online business accounts for 30% of his monthly income, with overseas clients mainly based in Nigeria, South Africa and France. But he says his profits could be much higher if he only had full access to PayPal – one of the world leaders in online payments for the e-commerce industry.

PayPal blocks withdrawalsPayPal, which has been available in Ivory Coast since 2014, generally allows users to receive money and withdraw it directly in cash. But since PayPal restricts certain transactions in Côte d’Ivoire due to cybercrime risks, Côte d’Ivoire customers and merchants can only pay by linking a credit card to their PayPal accounts and cannot receive or withdraw money. .

“I find it discriminatory, it’s not normal that I don’t have access to my money just because I’m Ivorian,” says Mory, an entrepreneur who offers online services to artists. “We have to create accounts based in Morocco or elsewhere but when PayPal realizes that we don’t live there, they block our accounts and our money with it.”

The young businessman from Abidjan has no choice but to accept PayPal payments if he does not want to lose customers.

Local solutionsAccording to a study by McKinsey & Company, e-commerce could represent 10% of retail sales in the largest African economies by 2025. In Côte d’Ivoire, this sector already represents more than 9% of the country’s GDP.

Aware of the potential of this market, Idriss Marcial Monthe co-founded CinetPay in 2016, a payment and money transfer platform that works without a bank card. “Before, I had a company selling domain names online and I traveled to collect payments from my customers. Between the cost of transport and the traffic jams, it was not viable. We then decided to integrate the three mobile payment operators from Côte d’Ivoire on our site,” says the businessman.

Monthe’s idea is now used in more than 10 French-speaking countries at low cost. For the president of CinetPay, security and modernization go hand in hand. According to him, the fight against cybercrime could open the door to innovations that could revolutionize the e-commerce sector in Côte d’Ivoire.

Focus on banking solutions

Revolutionizing the entire e-commerce industry is not an easy task when only around 20% of the population has a bank account.

For economist Yao Seraphin, structural reforms are needed – as well as closer collaboration between the state and private companies like Visa, MasterCard and PayPal.

Daniel Ahouassa agrees. He co-founded APaym, an app that allows merchants to accept all types of bank payments. During the Ivorian Digital Forum held in Abidjan on September 2 and 3, he called on telecommunications players to seize this market: “We must work with the banks to develop and raise public awareness of the means of electronic payment. We have to make it reliable and accessible,” he told FRANCE 24 at the event.

In the meantime, small traders continue to pay a high price for underdeveloped online payment methods in Côte d’Ivoire.

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