Why small business owners still struggle with Fintechs

Savings or current?

It's a question you hear when making a card payment in Nigeria. At restaurants, cinemas, or agents, the question is everywhere. 

However, when it comes to e-commerce, the shopper experience is different. No one asks if your card is linked to a savings or current account. You select the items you want to purchase, head to the checkout, and pay using one of several options—bank transfer, card, or even USSD. 

Let's look at the bank transfer option a little closer. I recently purchased a dress from an Instagram vendor (we will explain why small businesses often exist solely on social channels). When the vendor calculated my bill, she sent the total plus a corporate account number via Instagram DM. It's nothing out of the ordinary when shopping on social platforms like Instagram or Facebook. But while I copied the account number and navigated my way through my bank's mobile app to pay, a thought crossed my mind.

"Is this the most efficient way of doing this?"

You might think that the transfer option through a mobile bank app is as simple as it gets. Well, that's partly true. Once upon a time, mobile banking apps didn't exist. So, with that lens, it is clear that online shopping is much easier today. On the other hand, exchanging receipts as proof of payment and a vendor claiming they did not receive your funds remains a risk to many shoppers. 

So, for businesses that leverage social selling, what can be done? Focusing on small business owners who operate on Instagram, the majority still rely on the conventional use of mobile banking apps. So why aren't all small businesses using payment gateways like Flutterwave or Paystack? What are the transaction costs? What job do fintechs do for small brands who want to receive payments easily?

Let's examine the rise of social shopping first.

Social commerce

E-commerce has been steadily rising since 2012 in Nigeria, with