This is a follow-up to yesterday’s rant about PayPal’s lack of availability in sub-Saharan Africa.
Although PayPal is ubiquitous in the States and Europe, there are many alternatives available online, most with far more relaxed policies about where and how money can be sent. The alternatives are more expensive and less flexible, but it’s utterly untrue that there are no options for African entrepreneurs.
Here are some practical solutions to PayPal’s limited African availability.
Moneybookers is roughly equivalent to PayPal in features and it allows users to transfer their balance to any bank account in the world, or will mail a check in one of several currencies to an address of your choice. Incoming transfers are accompanied by insanely high fees in throughout Africa, but not as high as the fees to cash an international check. They solve the fraud problem by withholding ~7% of each transaction to cover refunds, but you can apply to opt out of this service after a certain period.
2Checkout is a credit card processor that allows anyone to set up a merchant account with them. Compared with other services, start-up feeds are low ($50), although they take a percentage of each transaction. Their preferred method of payment is a special MasterCard debit card that they mail to you and holds the balance of each transaction. You have to live in a country with ATMs that accept MasterCard (or Maestro), but it’s a viable alternative if you want to accept credit cards online.
iKobo is a money transfer service that, like 2Checkout, pays out via a debit card (VISA). Their business services are somewhat limited, although they appear to offer merchant accounts all over the world. Inter-African fees for transfers are about 6%, which makes it cheaper than Western Union, but more expensive than PayPal would be if it actually worked here.
NetTeller is a UK service that bills itself as a PayPal alternative. It appears to offer payments to just about every country in the world.
I’ve been told that e-Gold is quite popular in Nigeria, although I’ve never met anyone who’s actually used it.
I know there are some homegrown solutions in South Africa, but I’m unsure of their availability for the rest of the sub-Saharan Africa. How do you get around PayPal’s restrictions on where and how money can be sent? What are your experiences with the above solutions? Are there others that you recommend?
I can't thank you enough for this…been looking all over for this. Thanks!
Hi Theresa -
Thanks for this.. you are touching on an incredibly important topic.
Kabissa has traditionally accepted payment via wire transfer, check drawn on US banks, and paypal. In addition, for Nigeria where we have many members, we have been accepting payments via a local partner organisation in Lagos.. this has worked out fairly well for us but is an informal "sneakernet" method that isn't really practicable or scalable.
Cheers,
Tobias
i second kainvestor. thanks a million for this major help
http://www.worknets.org/wiki.cgi?MoneyTransfer
A short wiki page on money transfer to africa
What appears to be missing still is accepting payments within Africa for online transactions. The African Virtual School is still searching for a solution to the question: How do you get Africans to be able to pay for online services. The present common method of depositing money into a bank account first is too cumbersome.
One of my contacts on twitter recently posted concerning PesaPal in Kenya: http://beta.pesapal.com/
http://www.pesapal.com
e-gold used to be very popular in Nigeria, but not any more. e-gold has been facing woes from the US government and has had to restrict use, demanding ID. This has pushed many away.
Moneybookers is no use to NIGERIANS –though its based in UK where hundreds of thousand Nigerians live, it refuses to deal with Nigerian banks–Unless we Africans cooperate and form our own AFRIPAL whereby we talk to African banks. Leaving our online business future in the hands of foreigners is unforgivable. Where are the brilliant African programmers?
I think the only way is to not use paypal. Alertpay is a better option for international users. Sign up is free at https://www.alertpay.com/?TmMNs%2bOzGeEsqGS4O%2b%2fveg%3d%3d
FloCash is another alternative.
http://www.humanipo.com/blog/124/FloCash-Africas-Answer-to-Paypal
This is exactly what I need as I have a client in Africa who wants me to create a website for his business and it’s a pain that Paypal is not very helpful. Thank you!