1. Author: Michael Adeyeye Department of Electrical and Information Engineering, Covenant University, Ota, Nigeria Presented by: Merlene Headley & Rudi McClean 1

2.  Our presentation is a summary of the paper written by Michael Adeyeye. His paper seeks to identify different levels of ecommerce in Nigeria among consumers and businesses. It also evaluates a case study of citizens involvement to identify the best payment solution in ecommerce. We will then provide an evaluation of this paper. 2

3.  Definition of e-commerce  Integration of communications, data management and security capabilities allows businesses to exchange information on goods and services  Act of conducting transactions via electronic medium 3

4.  Nigeria - a developing nation emerging in the ecommerce market, tapped into the use of m commerce using mobile devices  High risk security issues – need to handle authentication and non repudiation  Note that authentication, confidentiality and trust are driving force ensuring ecommerce is safe  Use of digital signature for authentication and digital signature verification for non repudiation 4

5.  Major business models are B2B and B2C  Requirements to conduct ecommerce on the internet:  Online merchant account, payment gateway and mail or web host account and servers  Web hosting solutions – dependent on cost In house all requirements is controlled by investor Instant web front most requirements are outsourced Nigeria mainly use instant solutions 5

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7.  Main payment methods:  Digital Cash Digital wallet which is a plug in to web browsers houses receipts and invoices for payments as well as cash which is withdrawn to complete online transactions Main advantage - does not need personal details of buyer Payment is immediate 7

8.  Credit Cards The card holder has a revolving credit line which can be used for both traditional and e commerce. Card has a specified limit where purchases and cash advances are made up to that limit. Settlement can be in full within a specified period or minimum payment by an expected date main advantage – available cash when needed Main disadvantage – high charges applied 8

9.  Online check/ Electronic Transfer  When using online check, digits are entered during the transaction process  Electronic transfer involves a financial clearing house - transfer funds from the originator to receiver  Debit Card  Debit card holder access their own funds from their financial institution, purchases totals deducted  Use debit card payment processing facility Can only spend what you have, cash payment is immediate Less charges apply 9

10.  Micropayment  Allows vendors to sell over the internet at unit prices  Can have amounts as low as one cent  Money Orders  Uses third party to send payment to the receiver  Western union, American express etc  Small cost to process order  Transaction is protected 10

11.  Electronic banking  Also known as e banking – Banking services conducted using electronic medium. Include withdrawals, fund transfer, check balances  Virtual Private network (VPN) to connect to other branches  Branches also connected using VSAT - very small aperture terminal; a satellite communication system  Extranet - use internet technologies to share information with its customer uses for data encryption 11

12.  Internet banking  Intranet - Internal to the bank where staff has access to required information both customer and operational related  Telephone banking  One branch call another where an account is domicile to confirm validity of an account. 12

13.  Mobile banking  Advent of global system for mobile telecommunication banks conduct business using this medium  Phone number becomes bank account number  Transfer funds to other phone accounts  Transact e products like phone top ups etc  Automated Telling Machine (ATM)  Situated in stores and hotels where access to quick cash, make deposits  self service operation 13

14.  Web merchants  Conduct business via their websites purchases for goods and services  Prepaid services. E.g. a prepaid card to buy amount of purchases online; also direct payment to seller’s bank consider online method, proof of payment is required  Other prepaid card services home entertainment 14

15.  Payment gateway providers  Possess card information used online or at point of sale (POS) terminals  Act as an interface to the banking system Interswitch (Nigeria) Caribbean Integrated Financial Service Inc. or CarIFS (Barbados & Caribbean) 15

16.  Copies of the same questionnaire was distributed to about 1/5 of the population of approximately 6750 members of a tertiary institution in the suburb of Lagos-State, Nigeria. This 1/5 was made up of students, non-academic staff, semi-skilled workers and academic staff.  Daily newspapers, articles and face-to- face conversation with staff of some of the banks, e-commerce service providers were also used in Mr. Adeyeye’s research. 16

17.  Sample of multiple choice questions used to determine the extent of participation of Nigerians in e-commerce:  Do you conduct transactions on the internet?  If yes, what payment method do you use?  What is your job description?  What is your computer competence level?  Should you want to make a purchase online, what payment method would you prefer. 17

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20.  About 84% of the sample does not conduct transactions on the internet even though they are computer literate (Table 2.0)  The 16% that engage in e-commerce do so through direct payments, credit cards and prepaid cards to settle bills  Of that 16% that engages in ecommerce:  65% use prepaid cards, mostly to check examination results online, buy airtime or renew subscriptions  25% use credit cards to make transactions (mostly from foreign websites) 20

21.  The most preferred method is the prepaid card system, with 43% of persons choosing it due to its ease of acquisition and use.  27% preferred direct payment to seller’s account  18% chose the credit card system as their preferred method  3% of those sampled didn’t state their preferred payment method (could be an indication that they aren’t aware of e- commerce at this present age) 21

22.  Regarding e-commerce, Nigeria has been rated as the highest risk country across the globe followed by Indonesia (Cybersource 2005).  To date, many orders from Nigeria are NOT processed due to the above 22

23.  It was indicated that the most appropriate payment methods for use in Nigeria are prepaid/debit card system and direct payment to seller’s accounts.  The debit and prepaid card methods both ensure that the customer has sufficient funds in his/her account or by buying a card respectively.  Direct payment was chosen by many since there is a reduced risk in terms of fraud  A standard e-commerce system in Nigeria should be set up to ensure that banks with different proprietary technologies can still connect to each other. 23

24.  Paper was well written, except for a few grammatical errors which made meanings a bit hard to understand  Most of Nigeria’s payment methods can be applied here in Barbados and the Caribbean also  It would be nice to see biometric payment implemented here in Barbados 24

25.  Difference in services when compare locally:  Internet banking – term definition  Mobile banking – use of phone number for account number  Telephone banking – term definition. 25

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