NAIROBI Oct 25 PayPal, the payments services
arm of eBay, has entered a partnership with one of east
Africa's biggest lenders, Equity Bank, to tap into the
fast-growing African economies.
African states, enjoying annual economic growth averaging 5
percent, have lagged developed counterparts in the adoption of
electronic commerce. But companies such as online retailer
Jumia, a would-be African Amazon, are eyeing the market.
Efi Dahan, Paypal's regional director for Africa and Israel,
said the company was looking for triple-digit growth on the
continent, without providing specific numbers.
"We understand the potential of this market and we will
definitely extend the business in other countries," Dahan told
Reuters at an event to sign the deal on Friday.
He said the California-based business entered South Africa
three years ago and they were pleased by the growth there.
Showing the growth potential, James Mwangi, Equity Bank's
chief executive, said Kenya's share of e-commerce transactions
was less than one percent of all trade transactions, while
e-commerce in South Africa was 4 percent of the total.
Mwangi, whose bank is the largest by customers in Kenya,
said he hoped the bank would be allowed to offer the services to
the rest of east Africa, where Equity runs outlets in Tanzania,
Rwanda, Uganda and South Sudan.
The service links PayPal online accounts with accounts at
the bank, allowing shoppers and merchants to buy and sell across
the globe through the Internet.
Mwangi said those who sign up for the service, like local
travel and leisure firms offering safaris online, will have
access to a market of 137 million PayPal users.
"By merely registering, one gets into a market that is
larger than the east African population," he said referring to
the 120 million people who live in the region.
Firms offering electronic commerce services on the continent
face obstacles like a lack of proper, precise addresses, which
hinder the delivery of goods bought and paid for online.
Still, a company like Jumia is betting that it can propel a
middle class out of the street markets and straight onto its
websites, it said on Thursday.
Equity also expects the millions of Kenyans abroad to tap
the PayPal service, raising its share of the remittances
business to 30 percent from 16 percent in a year, Mwangi added.
Remittances are the fourth-largest source of foreign
exchange in east Africa's biggest economy after revenue from
tea, horticulture and tourism. A total of $1.17 billion was sent
back to Kenya by its citizens abroad last year.