1. E-Commerce, Business Methods and Evaluation of Payment Methods in Nigeria Written by Michael Adeyeye Department of Electrical and Information Engineering, Covenant University, Ota, Nigeria Presented by Kareem Herbert & Daison Lowe

2. Contents Introduction Payment Methods E-Commerce Methods In Nigerian Banks Evaluation of e-Commerce participation by the public Evaluation of e-Commerce participation by the public Presentation of Results Analysis and Discussion Conclusion and Recommendation

3. Introduction What is e-Commerce?  The integration of communications, data management, and security capabilities that allows organizations to exchange information on sale of goods and services.  An act of conducting transaction via electronic medium such as though the TV, Fax, or the internet. 3

4. Introduction (Cont’d) Security a major problem with many payment methods in Nigeria. Some of these security problems are:  Trust  Non-repudiation  Confidentiality  Authentication 4

5. Introduction (Cont’d) Two main e-commerce business models ◦ Business to Business (B2B) ◦Occurs between two organizations, is characterized by large volumes of products and small price margin. ◦ Business to Consumer (B2C) ◦Occurs between an organization and an individual, is characterized by small volumes of products and large price margin. 5

6. Introduction (Cont’d) Other e-commerce business models ◦ Business to Affiliate model (B2A) ◦ Business to Portal model (B2P) ◦ Consumer to Consumer model (C2C) 6

7. Introduction (Cont’d) Conducting e-commerce over the internet requires  Servers  Online merchant accounts  Payment gateways  Web host accounts 7

8. Introduction (Cont’d) In-house web front/private hosting  All requirements are provided or controlled by the investor. Instant web front solution  Very few requirements are provided or controlled by the investor. Instant storefront  Requires a shared or dedicated web hosting plan provided by a firm. 8

9. Payment Methods Most common payment methods  Digital cash  It entails the use of a digital wallet where invoice or receipt of payment is kept and cash is withdrawn.  Credit cards  A card whose holder has been granted a revolving credit line.  Online check/electronic fund transfer  A buyer enters the digits or numbers found on the check to carry out transactions 9

10. Payment Methods (Cont’d) Other payment methods  Debit card  Micropayment  Money orders 10

11. e-Commerce methods in Nigerian banks Types of business methods in Nigeria  Electronic banking  Internet banking  Telephone banking  Mobile banking  Other transaction method  Automated Teller Machine (ATM) 11

12. E-commerce methods by online service providers Web merchants  Are those individuals or organizations that conduct transaction and make it possible for people to buy goods or render services to people via their websites. 12

13. E-commerce methods by online service providers (Cont’d) Payment gateway providers  Process card information used online or at point of sale (POS) terminals. These terminals act as an interface to the banking system. Present gateways in Nigeria:  Interswitch  Etranzact 13

14. Evaluation of E-commerce Participation By The Public Research Gathering Location  Tertiary Institution In Lagos-State, Nigeria Study Group Composition  Scholars  Businessmen  Graduate Students  Post Graduate Students Total Number of Candidates 6750 Candidates, 1/5 of the total was only sampled 14

15. Evaluation of E-commerce Participation By The Public (Cont’d) Other Research Materials Used  Daily Newspaper  Articles  Face to Face Conversation with staff of some banks  E-commerce Service Provider 15

16. Research Questions Asked  Do you conduct your transaction on the internet ?  If yes, what payment method do you use ?  Your job description  Your computer competence level  Should you want to make payment method online what payment method would you prefer ? Research Questions 16

17. Presentation of Results 17

18. Presentation of Results (Cont’d) 18

19. Analysis and Discussion Analysis of Current Payment  84% of the total sample do not conduct. transactions on the internet (Misguided Figure).  16% practice e-commerce.  65% use prepaid cards.  25% conduct transaction by using a credit card.  20% use direct payment. 19

20. Analysis and Discussion (Cont’d) Analysis of Prefer Payment  27% prefer direct payment as a payment method.  43% prefer the prepaid/debit card method.  18% prefer credit card payment method.  3% of the sample did make a choice on a prefer method. Suggested Payment Method  Biometric Payment 20

21. Conclusion and Recommendation Conclusion  Direct payment and prepaid/debit card payment are the appropriate methods for e-commerce in Nigeria. Recommendation  Having a card system that hides a user’s sensitive data by using a PIN and it is based on smart card technology.  E-commerce service provider should provide a reliable payment gateway to banks. 21

22. Conclusion and Recommendation (Cont’d) Recommendation  Payment gateway should be connect regardless of their proprietary technologies.  A regulatory body containing members of banks and e-commerce service provider should be created so as to ensure a standard e-commerce system in Nigeria. 22

23. References 23

24. References (Cont’d) 24

25. Personal View of The Paper 24