E-Commerce Solutions

CowriePay: New Nigerian online payment startup

For many people in Africa, credit cards, debit cards, online payment gateways and the like are incomprehensible. Yet how can this be possible when a huge chunk of inhabitants in this continent do not have even identity cards? How can they even dream of formal or personal financial inclusivity?

Now, a startup in Nigeria, is allowing the residents to enjoy payment, credit and loan facilities in a way that has not been dreamt of in the country and the continent before. Formally launched this year, CowriePay is a payment service provider that allows customers to pay for purchases directly from pre-funded e-wallet or on credit - spend now and pay later arrangement.

“CowriePay is dedicated to deepening financial services in emerging markets. We provide a secured and convenient platform that allows merchants and lenders to offer mutually beneficial services to their customers. It solves the problems of secure payments and consumer financing - common problems in emerging e-commerce markets.” Malik Suley, the startup founder, tells us.

But how viable is this innovation in a country with identity management crises? Suley is confident that the objectives of his innovation are achievable as the issue of identity can be solved with the right interventions.

“CowriePay is different. Our loan service providers are microfinance banks and licensed finance companies spread across the country allowing most wide-spread participation for urban and rural folks. Having said that, we have a long way to go as identity management is still an issue in the country and most rural folks do not have any means of identification. We are working with the industry and other stakeholders to develop and promote best [identity] practice from across the country and the world in this area,” he says.

How does CowriePay work?

“CowriePay’s core application is cloud based. Our client application is available on iPhone, Android and soon will be available on BlackBerry and Windows platform,” Suley informs us.

The CowriePay system consists of three components that include shoppers, merchants and lenders, all enjoying free membership. Once you have created a free account online and undergone a phone verification process, you are able to enjoy the services depending on the category that you belong to whether online or offline.

A shopper accepts up to 100,000 Naira (about $502) credit into his e-wallet to spend at a merchant of choice and pay monthly at little or no cost. Merchants are able to accept CowriePay (while increasing their sales) and have payment in their bank accounts within 48 hours. Lenders, that includes banks and microfinance institutions, are able to increase their liability portfolios by lending without any risk.

In this way, you can make, request, receive payments and send money transfers using this app. This is done with an online value addition.

“Online consumer finance is new here on the continent and our approach to lending is unique,” explains Suley. “By working with multiple loan service providers, we are able to get the competitive rates for our customers. We also employ technology wherever possible to deal with the infrastructure challenge in the country. This allows customers to initiate loan applications from the point of sale.”

According to the founder, financial inclusion is an issue across the continent. He tells us: “In Nigeria, only about 37% of the adult population are formally banked while about 40% are totally excluded from the financial system. In terms of access to credit facility, only about 2.6% have a loan account with a bank.”

But is the government doing nothing to change the situation? “There are deliberate efforts by the governments to increase financial inclusion in the country. It’s a slow process, however, we have seen an increase in the number of bank accounts in the last three to five years and we are convinced that the trend will continue as confirmed by recent surveys,” Suley forecasts.  

The need for financial inclusivity apart Suley, says “it’s about quality of life. There is no reason why a hardworking family in Africa should live worse than their counterparts in other parts of the world.”

“We are convinced that by helping the customers match their expenses to their income with accessible credit plans, they are able to acquire the basic necessities of life and thereby improve their quality of life.”

What is the roadmap for success?

Despite the many challenges facing the country and the continent at large, Suley is confident that the road to success is well mapped.

“Payments and consumer finance in Nigeria is faced with several issues of which lack of identification system is a major one. This is being addressed with the introduction of the Bank Verification Number, introduced by the [Nigeria] Central Bank and the National identity Card project, managed by the National Identity Management Corporation,” he says.

“Companies like PayPal and other payment providers are our competitors because we operate in the same space. However, payment space is wide and our strategy is to be the best in our chosen niche,” says Suley.

With the majority of national and regional microfinance institutions and banks in Nigeria already in the system or lined up for inclusion, CowriePay is set to the right direction. With a straight forward and seemingly simple agenda, the startup’s goal is to lead in the online consumer finance space.

“Our approach is to find innovative solutions, powered by technology, around the issues, rather than being defined by the issues,” Suley concludes.


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Daniel Muraga

Daniel Muraga is an experienced online writer and communications professional based in Kenya.

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