In the context of the dynamic and growing Nigerian e-commerce market, “Pay on Delivery” (POD) has become crucial in representing consumer behavior and their level of trust. This article goes further in unfolding some aspects of POD, reasons for popularity increases, difficulties that come along with POD, and its likelihood in Nigeria.
The Appeal of Pay on Delivery
Building Trust with Consumers
This approach solves customer concerns in e-commerce business, ensuring that a client confirms the authenticity of the product before completing the purchase process.
Addressing Payment Infrastructure Challenges
As we have illustrated, Nigeria’s digital payment systems are inept, and therefore, POD is a more effective solution, which can allow consumers who may be unable to pay through other conventional online platforms.
Major E-commerce Platforms Offering Pay on Delivery in Nigeria
Jumia Nigeria
Some e-commerce companies like Jumia provide POD services with conditions as follows. Customers can use cash, Mobile Money (JumiaPay wallet) or debit cards on delivery of the products. However, there are some restrictions that should be taken into account, one is the value of the order, and other is locations for delivery.
Konga
In 2019, Konga expanded its POD services to Abuja city with the intention of growing its market front and, at the same time, improving the customers’ experience. The change aligns with the platform to adapt to consumer tendencies relating to payment choices.
Challenges Associated with Pay on Delivery
Security Risks
With POD there are security issues for instance delivery crew may be vulnerable to being mugged after carrying out the cash transactions.
High Rate of Order Returns
As POD is highly convenient it becomes prone to high rate of order cancellations or refusal at the time delivery thus high operational cost to the retailers.
Operational Costs for Retailers
POD management involves more overhead costs, for instance accepting cash, handling of returns which is a burden on the operational capability of the store.
Case Study: PayPorte’s Suspension of Pay on Delivery in Nigeria
Reasons for Suspension
Since 2017, PayPorte has stopped its POD services, citing some security issues and over-compliance with the cashless policy of the Central Bank of Nigeria. This decision is a clear example of how hard-on-the-stars retailers are in trying to balance between the customers and how their business works.
Impact on Business Operations
This suspension made PayPorte bring changes to the Online Payment Industry to make customers change to using a more secure and more efficient Online Payment Systems, infrastructure of PayPorte.
Solutions to Pay on Delivery Challenges
Selligate’s E-commerce Fulfillment Services
Selligate addresses several of the POD related issues through its order fulfilment and cash management services intended to help businesses to address issues arising from POD orders effectively within Nigeria.
Enhancing Payment Security Measures
Adapting strong security measures and investing in secure Payment environments could cause a decrease in reliance on Pay on Delivery in Nigeria making e-commerce safer.
Conclusion
Pay on Delivery has been pivotal in making headway for the growth of the e-commerce sector in Nigeria by creating consumer trust and owing to limitations in payment infrastructures. However, the risks and costs inherent with it leading to an analysis of feasibility and sustainability. Since the electronic payment systems are being developed and consumers’ trust to the Internet purchase increases, the Nigerian e-commerce market may find the tendency to go more in the prepayment mode but which does not hinder convenience and business optimization.
