Data Security Constrains Expansion of E-Commerce in Nigeria

Nigeria has been ranked the rising star of Africa's fast-growing e-commerce sector with the economy topping all other African nations by number of Internet users and mobile phone owners. But many Nigerians still think of internet fraud when online transaction is mentioned.

In 2014 ecommerce in Nigeria recorded over $2 million worth of online transactions per week. According mobilemediainfotech, Nigeria’s e-commerce market is developing rapidly, with an estimated growth rate of 25 percent annually.

A study conducted in 2014 showed that 63 per cent of Nigeria’s 50 million internet users had bought at least one item online. Even with this number e-commerce penetration continues to encounter setbacks.

A random survey conducted on the street of Lagos showed that many Nigerians are still skeptical about buying goods online or making payment for goods purchased online.

Majority of the people said they were not comfortable giving out their financial details online because they cannot vouch for the security of such payment gateways. Others emphasized the problem of slow internet connection and time wasted trying to open web pages to view various products.

Bisi Oladele, a lawyer based in Lagos said she goes online to check for prices of items she intends to buy but prefers to walk into a supermarket or shop to buy the products she desires. She said her decision was based on the fact that she is not comfortable giving out her personal or financial information and the cost of delivering items is high.


An inside source in one of the leading online retail shops in Nigeria said that 83% of their customers prefer the cash on delivery option because of the issue of security of online payment and concerns of not receiving items bought. He said that Nigerians feel more comfortable paying cash for items purchased on delivery and only recently embraced the POS mode of payment largely due to the cashless policy.

 A customer relations executive one of the online car sites said while replying customers who have requested information she takes time to advice them not to give out their financial or personal details to anyone as Carmudi Nigeria will not request such details.

Unfortunately, the issue of data security does not apply to websites such as ASOS, Amazon, eBay, Aliexpress etc as Nigerians readily pay for items advertised on these foreign online stores with their master cards and wait for the items to be shipped to their location which may take 2 or 3 weeks. Chinedu Ugo, a student says he prefers to purchase items from international online retail stores and is comfortable paying before delivery with his MasterCard because he is sure he will get exactly what he paid for and all his purchases had always arrived before the deadline given by the store.