Twice in two weeks, taxi hailing app Uber introduced new payment options in Nigeria. Last week, Uber introduced cash payment in Nigeria. The feature which is being tested will see a small group of riders in Lagos getting the option, in-app, to pay in cash. If they select it, the driver will be notified once the trip commences, and reminded as soon as it ends, to collect the payment from the rider. If the test is highly successful and Uber finally decides to fully launch the cash payment option, Nigeria will become the seventh country where Uber is accepting cash payments after it rolled out the option in 6 countries.
While the company is still testing cash payment, it rolled out yet another payment feature. This time, the taxi hailing service announced it is now allowing its users to pay using Paga’s cashless payment system.
Taking a closer look at the developments at Uber Lagos, it is obvious that the company is striving to overcome a number of challenges, particularly payment, that it is being bombarded with on all sides and it all started with the announcement of new policies by the Central Bank of Nigeria (CBN). One of such is the restriction of monthly international transactions to US$500. For Uber, this is a major setback since each ride could cost up to $20 or more. For regular Uber users, they could use more than $500 in a month. For those that can’t spend up to that amount in a month, they are also trying to reduce their expenses especially those made via foreign exchange – transactions such as payment for Uber trips.
Uber also has another payment headache in Nigeria. Customers of several Nigerian banks are complaining that their cards are no longer accepted on Uber. The company also confirmed this via a newsletter it sent to its users and gotten by Innovation Village.
“We are aware that some riders have been experiencing widespread payment issues with the Uber app recently. We know you might have tried to get a ride but couldn’t due to this – sorry about that, we know that you depend on Uber for a reliable and efficient ride,” Uber stated.
According to Uber, a number of banks have specifically began declining Uber transactions and so as a result, customers may have tried to request an Uber but received the following message: [your credit card ending xxxx has been deemed invalid. Please update your billing settings ] or an outstanding balance was left on the user’s account due to a payment decline.
“Cards issued by Stanbic IBTC, Diamond Bank, Skye Bank, UBA, amongst others are still accepting Uber transactions so feel free to include these as payment methods if you currently hold a card with one of these banks,” Uber said.
In addition, many Uber customers are also complaining of the discrepancy in the receipt they receive from Uber and the debit alert they receive from their banks.
“The banks charge more than we see in the receipt. With the way things are, if something is not done urgently, I don’t think I will be sticking to Uber as such again,” a regular Uber rider told Innovation Village.
Integration disallowance
Despite Uber’s interest in opening up new payment channels, it is not allowing the integration of local payment methods into its system. If it had allowed this, it wouldn’t be worried about the policies of the Nigerian government through the Central Bank since it could just integrate Interswitch into its system and it would have avoided the CBN limits and be more competitive in the Nigerian market but this is not the case and for the first time, competitors have an edge over Uber.
Afrocab has been rejuvenated; it’s back and it accepts all forms of payment including cash and options provided by the local firms that Uber is still reluctant to open up to. While many Nigerians are happy about the introduction of Paga, closer look at how the feature works would show that it is not a real integration as would have been expected.
Uber at crossroads
For Uber to make it much easier for its officials in Lagos to get more people to use its app, it just has to open up its payment system to the methods that Nigerians are used to – such as Verve and Interswitch. When it does this in addition to cash payment, it can then be able to say that it has a surviving chance even with an unfavorable government policy.
This is why Uber has to decide whether the Nigerian market is big enough for it to risk opening up its technology for local payment services. Its decision would determine its fate in Nigeria – attract more users, or be satisfied with the few ones that can still use its service even in the midst of the very tough limitations that only strengthen similar local services.
