PayPal in Nigeria: Not Yet Uhuru for Local eCommerce

PayPal announced that they had commenced accepting Nigerians on their platform. The online payment solution giant in what may be viewed as a response to the recent announcement by MasterCard of their agreement with the Nigerian government stated that Nigerians could now sign up on their platform and begin to use its service. It is still a thing of wonder that they took so long to enter the Nigerian market even after the generally accepted excuse of perceived online corruption by Nigerians began to sound hollow.

However, the announcement of allowing Nigerians to use their platform rings hollow for deeper reasons. Allow me to touch on a few of them below.

Focused on Buyers

They have only granted restricted access to their services, allowing user to make purchases online while at the same time blocking Nigerian users from making sales. Focusing on buyers may sound great because people now have the chance to purchase products online that would not have been possible, but who does this really benefit and which economy is really being enriched?



You have to bear in mind that hard currency is being exchanged here and not local currency. Nigerians will be buying goods and services in dollars. They are only allowed to buy i.e. add value to the business and economy of other eCommerce platforms based in other countries. Note that you cannot use PayPal to buy something from a Nigerian eCommerce platform.

Excludes Merchant Accounts

PayPal excludes local eCommerce platforms from this bonanza of an announcement and they will not be able to tap into the immense benefit this holds. Simply put, PayPal allowing Nigerians to sign up does not add any real value as such to this critical sector of the economy. According to the recent rebasing of the Nigerian economy, online eCommerce now contributes a large chunk of the country’s GDP and still has room for growth. It may be difficult wrapping your mind around the fact that a company as huge as PayPal is coming into the country without adding anything of real value to this sector that will help spur the creation of more jobs and boost the economy. Rather, it has set things up in such a way that Nigerian consumers who should be given a fair chance of deciding whether to patronize Nigerian eCommerce platforms are made to look outwards to non-Nigerian eCommerce platforms.

Focuses on Expanding the Reach of Preferential Entities

It is not every country under the PayPal banner that has full access to PayPal services. Nigeria by virtue of this announcement has just joined the list of such countries. What most may not realize is that this aides the expansion of PayPal preferred entities. These entities are eCommerce platforms operating in countries where PayPal has granted full service. They can sell while Nigerians can only buy. Nigerians that want to use PayPal can only use it to buy from these PayPal preferred entities. Many would say that this is not fair on local Nigerian eCommerce platforms. They would say that it is not fair on Nigeria.

Conduit for Loss of Foreign Exchange

Common sense dictates that national sensitivities should be a huge consideration when companies at this level devise products and service they chose to launch in countries. They are not adding anything to local eCommerce and at the same time, they are providing a means for Nigerians to patronize foreign eCommerce platforms. A tit for tat approach where Nigerian platforms would be able to sell to others would be considered as being fair by most. Nigeria is reputed to have some 60 million internet users and a large chunk of that have gone online to pay for one thing or the other. These are the people that PayPal is seeking to pipe their preferential entities to, it will be considered as being fair in some quarters if the same PayPal can do the reverse.

There are those who are of the opinion that this is a step in the right direction and PayPal will get to grant Nigerians greater access in the near future. They fail to see that not every country that PayPal claims to operate in have full access. That is, Nigeria will just be joining the list of countries that have restricted access to their services. Moreover, when you consider the points above, it does look like they are only interested in expanding so that they could help expand preferential entities like clients and businesses in countries where they give full access to their service.

This in a way looks more like another form of colonialism as they extend the boundaries of their frontiers, in line with making sure that the “empire” always has the ascendency over other “territories”. Besides, they have not allowed countries that have been on the “waiting list” as it concerns granting them full access to their service, how will they then permit Nigerians not just to buy but to sell? They do not even have a plan to allow local eCommerce platforms to buy and sell to each other.

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