Being able to receive payment online in Nigeria is a lot of work. Something that oughta be supposedly seamless became something that you have to do research at PHD level because you own a business. This shouldn’t be. Here’s a post about our options as developers and the various Online Payment Gateways in Nigeria we can use.
HOW PAYMENT GATEWAYS WORK
There are a lot of misconceptions around how credit cards are processed on the web. The reality is that it is fairly complicated to set up the first time and it’s probably more costly than you’d like.
There are 4 things you need to accept payment generally on your website.
- A merchant account: A merchant account is a type of bank account that allows you to accept payments via debit or credit cards. In web based scenarios, you’re most likely not going to be creating your own merchant bank account*, rather you will be entering into a merchant agreement with the payment processor who operates a merchant bank account. When you enter into an agreement with a payment processor they will assign you a merchant ID to identify you as a merchant but you’ll be one step removed from the actual merchant account.
- A payment gateway: This is the service your website will use to initiate a transaction and to retrieve feedback such as approved or declined. The payment gateway is responsible for providing the settlement reports as well as initiating refunds and voiding transactions. The gateway handles all of the sensitive information in a secure way. It also commonly performs several anti-fraud measures such as address verification or geolocation checks. You never communicate with the payment processor directly, only indirectly through the gateway. When the processor determines if a transaction is approved or declined, it passes that authorization back to the gateway which provides your e-commerce system with a response. This is the crux of our post. 🙂
- A payment processor: The payment processor is who you will be entering into an agreement with and they are the ones doing all of the heavy lifting. They are also the component taking on much of the risk and consequently they will scrutinize you and your business before approving an agreement with you. They are very different from (2) above but in Nigeria, the payment gateways we have also serve as payment processors.
- E-commerce (i.e. shopping cart): You need a way to sell your products, right? This is normally done by (2) and (3) above so I won’t go into it in detail.
WHY WE NEED GOOD ONLINE PAYMENT GATEWAYS IN NIGERIA
Although there are international online payment gateways/processors that can handle e-payments in Nigeria, they come with high transaction fees and restrictions. That’s why this post isn’t just about Online Payment Gateways, but Online Payment Gateways in Nigeria.
So starting from the top, in no particular order:
Interswitch is an Africa-focused integrated digital payments and commerce company that facilitates the electronic circulation of money as well as the exchange of value between individuals and organisations on a timely and consistent basis. A web merchant can receive online payment from cardholders via Interswitch WebPay or Webpaydirect.
N150, 000 (One Hundred and Fifty Thousand Naira).
For every subsequent successful transaction, a fee of 1.5% of the value of the transaction subject to a cap of N2,000 is charged. (i.e. for transactions below N133,333, a fee of 1.5% applies), and N2,000 flat fee (for transactions above N133,333).
2. Vogue Pay
VoguePay is a unique online payment processor whose vision is to offer buyers and sellers a secure and easy-to-use means of transacting business online.
N1500 (with Corporate Affairs Commission Certificate) and N2500 (with Government issued Identity cards)
Verve Card/ Naira MasterCard – 2.5%
Visa (Vpay) integration – 2.5%
International Payments: USD Debit/Credit Card Visa and MasterCard 4.5% (No Gateway Fees Applicable)
1% + 120 Naira
New to the group, but fast overtaking them, Paystack is amazing. I even opened an account with them so I could sell some stuff on my personal website but unfortunately they don’t offer plans for personal websites. (I personally think they’re missing an entire market here.)
Paystack is a payments platform that makes the online payments process seamless for both the consumers and the businesses they are trying to pay.
Setup Fee: Free
Local Cards: 1,9% + ₦100
International Cards: 3.9% + ₦100
₦100 fee is waived for transactions less than ₦2500.
GTPay is a secure internet payment gateway developed to facilitate payments online using debit Cards issued by banks on the Interswitch Network. GTPay plugs in seamlessly with the existing websites of customers and acts as a bridge between the customer’s website and financial institutions (Banks). The payment solution:
–Provides a convenient alternative payment channel to all customers.
–Enables cardholders to pay merchants (our customers) for internet purchases of goods and services from the comfort of their offices/homes by supplying details of their local debit/credit cards.
–Ensures transaction amount is deducted from cards instantly and merchant’s account credited within 24 hours.
N75,000 (Seventy Five Thousand Naira)
MasterCard/Visa (local) – TRANSACTION FEE: 1.5% of transaction amount (subject to a maximum of N2,000)
Interswitch Verve (local) – TRANSACTION FEE: 1.5% of transaction amount (subject to a maximum of N2,000)
MasterCard/Visa (International) – TRANSACTION FEE: 3% of transaction amount; no cap
International Gateway Monthly Charge – N5,000
5. Simple Pay
Simplepay, our number 5 of Online Payment Gateways in Nigeria is a payment gateway that utilizes international acceptability of Zenith Globalpay to allow their customers accept payments online using their local and international Visa Card, MasterCard and Interswitch cards.
N300 per bank account verification
Verve Card/ Naira MasterCard – 1.5%
Etranzact Card/Web – 1.5%
Visa (Vpay) integration – 1.5%
International Payments: Debit/Credit Card Visa and MasterCard (Zenith Bank Transfer) – 5%
Transfer money to your linked bank account – N300.00 per transaction.
SMS Charges – N2
Receive Money – 1.00% plus N10.00 per transaction.
PayU makes number 6 on our Online Payment Gateways in Nigeria. They offer basically the same thing as the others listed above, but in tiers, so go check them out and see if you like what they offer.
There are other Online Payment Gateways in Nigeria that didn’t make the list, but are worthy of mention such as:
- Remita.. etc.
Recommended Reading: How much does it cost to build a website?