The fund is said “… will be used for the expansion of the company’s network, enhance its working capital and increase its operational capacity.”

The placement comprises of 1,520,000,000 ordinary shares of N1.00 each at N1.05 per share. This means that with about N55,000 you can participate.

Remember, this is a private place and not IPO. It’s usually opened to institutional investors and not the general public. If you are one, why not request for info here.

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The annual event  will hold on the 13th of May 2010 at Old Mutual Business school Mutual park, Jan Smuts Drive, Pinelands, 7405, Cape Town, South Africa.

Speakers;

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Earlier in the year, in our annual tracking of top website in Nigeria. I did mentioned that e-payment is one of the biggest opportunity yet unexplored in Nigeria. In a series of exploring e-payment service providers, we caught with the CEO of Virtual TerminaL Network, to take us through their world and how they plan to drive ecommerce in Nigeria. Enjoy the interview.

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WTN: So, in a nutshell what is VTN all about?

Peter: VTN allows buyers to pay for goods and services online and via their GSM phone anywhere world-wide.  A merchant could be in Abuja, Sokoto, Australia, Japan or China, while a buyer could be in Lagos or Kaduna.  VTN’s technology is a Web/Mobile payment network often described as a cash-funded PayPal type of payment platform.   By “cash-funded” I mean not credit – VTN is not a credit product, but it has many of the attributes and conveniences people associate with credit cards.  And location is not a factor unlike most other payment solutions.

That is a quick description of VTN, but there is much more.  To a GSM operator, VTN allows for real-time Mobile/Online air uptake. To a revenue collector, VTN is the ideal solution for revenue collections from the unbanked.  To a stock brokerage firm, VTN allows small players to participate in online real-time retail stock trading.  Depending on how you want to look at it, VTN has features unrivaled by any platform in the history of ePayments.

VTN is positioned to eliminate the payment problems faced by internet users in the emerging markets of Africa, with first rollout in Nigeria.

WTN: As a consumer, how flexible is your platform compare to others?

Peter: There is no comparison.   We have built a system that is very straightforward.  If you text your email address from any GSM phone in Nigeria to this number:[45609910286  ], (local number coming soon) you are registered on VTN!  You can receive funds on VTN even if you don’t have an account as a sender only needs your email and GSM phone number to establish a temporary account with the received funds in place. For those already registered, all you need is the email of recipient for them to receive funds.

You will then simply need to complete your profile to meet the KYC in order to access funds.  It takes 5 minutes to fully register on VTN’s web site.

There are various ways to fund your VTN account. The most popular at the moment are funding at the Bank and funding using electronic pins or scratch cards.   We have integrated with one of the switching companies to allow funding with bank-issued debit cards and this service will roll out in the near future.

Our ultimate goal is to bring a good percentage of the 80% unbanked in Nigeria into the modern day world of financial services.  We have an agreement with Bank PHB that allows any person – including any unbanked person – to enter a Bank PHB branch and fund their VTN account.  We believe this is a significant first step toward exposing unbanked individuals to the banking system as it gives everyone a valid reason for entering a bank.  Our approach is to encourage all funding methods that do not discriminate against the unbanked in Nigeria.

WTN: Talking about merchants, how can VTN help me collect money from customers?

Peter: Once you register as a merchant on VTN web site , you have various options to process payments.

1-Virtual terminal on your PC – Customer walks in to pay, you turn the VTN virtual terminal on, customers enters their pin and pays.

2-Buyer can pay into your VTN account, all they need is your email address.

3-Real-time online integration. Buyer can pay through your web site and they don’t have to leave your web site to consummate the transaction

4-Recurring billing. VTN debits the account of your customers monthly . This is good in the sense that you don’t have to remind your subscribers to pay their monthly bills, VTN does that for you and notify both parties if a transaction fails for non-sufficient funds. The system keeps retrying and notifying both parties so merchants can take appropriate actions.

As at today, there are over 3400 merchants on VTN.  This achievement did not happen overnight and you can be sure that merchants have put VTN through a more stringent comparative evaluations before signing up.  Next time you check the number of merchants I’m sure will have increased. Merchants are finding out that VTN is the best alternative solution for their online payment needs.

WTN: I understand there are KYC measure on the merchant side, what’s the implication of this?

Peter: KYC is a very important aspect of our business and one we take very seriously.  These are measures to ensure that we are dealing with legitimate businesses and not scams or money-laundering operations.

All merchants must upload two forms of ID’s in order to start processing payments on VTN.   This is part of our KYC.  Once a merchant or personal account holder has funds in their VTN account they can transfer them to any Bank in Nigeria in which they have an account.  Of course to have set up an account at a bank the merchant will have had to meet the KYC’s of the banks.

WTN: You platform has many services embedded into it, can you take us through it briefly?

Peter: That is true. It would have been easier to just focus on payment and nothing else. You can’t do that in the emerging market like Nigeria and succeed.  VTN tries to make up for the lost time in our ability to participate in ecommerce by integrating many services from the start.

We know many global merchants will drag their feet initially so we partnered with seasoned providers to embed services such as online virtual card, email marketing, Free SMS, etc.

WTN: Security-wise, how safe is your platform to protect our data from unauthorized access?

Peter: Our security has to be years ahead of what is the norm in order to gain the trust of our users and global merchants. This involves working with the best talent possible in all facets of our operations.

Here is how we address security on VTN:

–All sensitive transactions pass over a SSL, not just ordinary SSL but EV SSL with extended encryption that is common among financial institutions and banks ;

-Sensitive data submitted by customers are encrypted;

-Customers have the ability to lock their account to a particular IP address. What that means is that if you have a static IP address, you can lock your VTN account to that IP only. Which is essentially one computer in the world;

-VTN servers are securely hosted at our data center in the US with several backups, thereby ensuring optimal security and industry standard protection of hardware and data;

-Customers have the ability to lock access to their account to their mobile phone: This is handled by myaccountguard.com.

The importance of this is that an intruder cannot gain access to your VTN account unless they have your login details and your mobile phone. That is a very difficult combination of security to brake. The way it works is that during the logon process, a 4 digit pin is generated and displayed on your cell phone. The life span of this pin is about few seconds and may never be issued to you again for the next 50 years.

WTN: How save and accessible is money transferred on your platform?

Peter: VTN has processed millions of transactions pre- launch without any major issue.  We are confident that our platform is at the tip and pinnacle of any secured platform.

Without divulging too much information, I would like to let you in on a particular case. A customer allowed another individual to open a VTN account for him. This is against our rule by the way, but it happened, and this customer was asked to fund his account. Shortly after the account was funded, the person with bad intent used the victim’s password to move the money to different accounts on VTN.

Ordinarily very few payment platforms could detect this as an irregularity because the scammer had all the details to access the account of the victim. In fact he owns the account legally, but VTN was able to prevent this fraud because our intelligent platform was able to detect this anomaly earlier on by simply using the logic that the likelihood of a customer moving money from same account to different account and incurring fees along the way is abnormal. VTN security department received a real-time report by the system to check that particular account further. It turned out that this is was an attempted fraud and the account was blocked. We recovered all the money and returned same to the rightful owner while the accounts of the scammer was cancelled. The scammer is now prevented from owning a VTN account again.

WTN: Looking at –payment in Nigeria, what is your view about it?

Peter: Nigerians need to wake up and fast. The situation since the advent of e-commerce has been that Nigerians have been knocking on doors of payment providers to allow them to pay online, essentially begging to spend their money. The response has been “we don’t want you”.  I’m not referring to the occasional ability to pay for one thing or the other using your bank-issued MasterCard or so.  These occasional trial and error successes are not sustainable for buyers in the long run and if you are a merchant in Nigeria, the odds are against you.  Something different is needed, and this is what prompted VTN’s development.

An analogy:  You have a jewelry store somewhere in Ikeja, Lagos and you accept debit cards issues by Banks in Nigeria.  It’s in the news for several years that the incident rate of debit card fraud in Oshogbo is very high and then shortly a man from Oshogbo shows up at the checkout counter to pay for expensive jewelry using a debit card.  What would your reactions be?  If you are an open-minded merchant you’d probably ask for more and more verifications and delay the transaction until you were satisfied.

If you were a less open-minded merchant unwilling to take the risk, you would probably cancel the transaction and say sorry, knowing that if it turns out that the cards was in fact a stolen one you will lose your jewelry and the processor will take the money back from your bank account plus the possibility of losing your hard-earned merchant account if there are more than usual fraud from your store.

Now relate this to an online merchants. The story is the same. Online merchants know your country by monitoring your IP address. Once the IP address says Nigeria. It’s an automatic decline on many merchants websites.  It does not matter if the card was approved by the issuer.  Why?  The risk is not worth it to the online merchant.

WTN: Our web industry, how/where do you see it in the next five years?

Peter: The web industry in Nigeria is at the level the ecommerce was in the West in the early 90’s globally. Those who want to get in now should not look back.  The Amazon, EBay and Yahoo business models worked very well because they were unique at the time and because the businesses had staying power.  It would be very difficult to start and gain tractions today because there are thousands of merchants providing similar service globally.

I believe that by 2015 there will be very significant growth from Africa and, within Africa, Nigeria and Egypt are roughly tied for the greatest numbers of internet users, the highest levels of penetration.  For Nigeria, user growth between 2000-2009 was 5,400%.  That is very significant and usage can only go up with the new fiber optic lines being laid now.  People should worry less about other components that make ecommerce work, once epayment is working, the market principles will take care of other components like fulfillment and shipping.

WTN: At the current pace we are moving, how do you think we can move faster?

Peter: We Nigerians must understand the dynamics of e-commerce and the merchant-buyer relationship discussed earlier.   We must work to standardize e-payment, make internet connection faster by lowering the cost of obtaining broadband.   Merchants and would be merchants should focus on local market, leveraging first mover advantages. The Nigeria market is too large to ignore.  When EBay started, many investors thought this was the worst business model ever. Think about it, why would any sane person buy and pay for the shipping of an item on eBay when you can go to a local store and buy same thing and pay later if you chose to. Well, ecommerce is not about ordinary common sense as has been proven now.

WTN: What should we expect from your company?

Peter: Expect a world class payment solution aiming at bringing out the best in those entrepreneurs who have been struggling for years to participate in global ecommerce.

A little story: I was having dinner with a friend 2 years ago in Abuja and discussing VTN model. He could not see beyond the problems of shipping and fraud.  Right there an SMS message came on his GSM phone, so I asked him, if he ever thought about how a GSM phone was invented. I reminded him that the phone in his hand was invented out of materials from rocks, rubber from trees, water plus some human brains who believed that combining all these free natural resources could aid communications and advance the human race. I also told him that if some people could do that how hard would it be to make the existing postal service work better, or prevent fraud.

He stopped eating and sign on VTN from his GSM phone. He was a convert there and then.

VTN is positioned to revolutionize how business is conducted in Nigeria.  There are many Pierre Omidyar’s, Jerry Yang’s and Jeff Bezos’s roaming the street of Lagos waiting to be discovered in Nigeria.  VTN will help them reach their potentials.

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As top internet brands shift attention to Africa, South Africa is the first destination to recieve the footprint of Paypal on African soil.

Paypal is a transaction broker platform that allows people transfer money to each other via email . It is also used on sites to recieve payment of good and services.

The service is available exclusively for account holders with First National Bank (this is not same in other countries.) A transaction cost of 1.5% is charge for ever transaction. While current Paypal users in South Africa can link their accounts with a FNB account others will have to open a FNB account and sync it with their new Paypal account.

This service is believe to also improve eBay usage in South Africa as Paypal is almost the primary means of payment on the site.

Going forward

Many Africans have been complaining about unavailability of these foreign services in Africa and regarding it as leaving so much cash on the table.

With this, South Africa is more like a test ground for other African markets, the service will be extended to other African countries in coming years.

Paypal site here.

FNB site here.

Nigeria… are you ready?

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Digital Sense Forum is an annual event where strategies and policies for the internet are being discussed before the continental meeting. The event was held last October but was scheduled to hold in April this year. Earlier than expected, the organizers said the reason for holding the event in April is burn out of the need to sell Nigerian stand on Internet policy to other neighbouring African countries. The timing also has much to do with the date of this year IGF (Internet Governance Forum) meeting which will be held earlier than last year’s September 14 and 17, 2010.

This year’s theme is ‘Five Years of IGF, the Way Forward for Nigeria.’ And schedule to hold at same venue where the last one was held; Golden Gate restaurant Ikoyi-Lagos. We published the position of DSA meeting last year here and hope to cover the event extensively this year.

A big Move

The Forum also invited one of Nigeria’s top web analysts “Loy Okezie” as part of the speakers to discuss the “Viable Online Startups in Nigeria and challenges”. This I believe is a big boost to the Nigerian web community. The recent Technology Outlook 2010 also has about 8 top web innovator participated in the event. These events were exclusively focused on older generation of Nigerian technologist but these days, the impact and input of young minds in the industry are being appreciated.

As the Internet Market witness a boost, the forming synergy of the stakeholders in the industry (both older and young generation) is a step in the right direction toward harnessing the potential of Nigerian Internet Market.

Event Details

Theme: Five Years of IGF, the Way Forward for Nigeria

Venue:  Golden Gate restaurant Ikoyi-Lagos

Date: Friday 16^th April 2010

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A research into the lifestyle of connected Nigerians which was started last year May, and conducted by ‘Gbenga Sesan has now been made public. The research seek to understand the pattern, growth and how Nigerian use the internet.

The Findings

The survey revealed that internet usage is most popular among young people aged 20 to 24. There is a 2:1 ratio when you compare the number of men and women online, and 6:1 when the comparison is between single and married people (divorced, widowed and others make up only 1%). Majority of respondents (41%) have completed either secondary school (equivalent of high school) education or a bachelors program (32%) while 36% quoted an income range of less than one million naira (about $6,600) per annum. Only 1 of every 5 responded to say that they do not own computers while 35% claim to have only one computer and 36% have one laptop computer alongside their desktop computer. More people seem to gain access from cybercafés and their workplace (55% combined) while only 17% have access at home.

Key Highlights:

• 80% if the respondents users Yahoo! mail.
• 36% uses Gmail.
• Almost half of the respondents subscribe to an access plan that allows them to stay online all day long.
• 1 in every 2 internet users own generators that allow them to stay online
• About a quarter of the respondent are unemployed. (Please note that majority of the respondents (41%) are high school graduates)
• 42% claim to have suffered bodily harm due to the length of time spent online at one time, with various symptoms such as back ache, wrist pain, etc.
• Two in every three respondents stated that internet access has had an impact on their career/job
• 1 in every 3 agree that their tendency to stay online has made them
  replace social contacts with online communication.
• Half of the respondents have completed online transactions but only 4% have fallen victims of any form of cybercrime.
• 80% of the respondents have either a laptop a desktop computer.
• 28% uses cybercafe to gain access while 27% gain access from work.
• a whopping 57% spends between 1-5 hours online daily.
• 89% of respondents uses Facebook
• 21% uses MySpace while 20% uses LinkedIn
• 41% updates their Social network status once in a while,  only 11% updates always.

Analyst View

First off, the research is based on Nigerians living in the cities,  it’s evident is the findings, where over 60% earn more than 1 million Naira per annum hand .  A good number of the respondent have both laptop and a desktop computer.

It’s no surprise that about 80% uses Yahoo mail. Gmail has not gained as much popularity has yahoo mail. Also looking at the internet subscription pattern, it favours users to have an “always on” plan because you cannot guarantee when you will have light. So having a daytime plan with no light will be a waste of time and money.

On the other hand, majority of the people get connected by having their generators on, yeah! This point out that, they are either into internet business or using the generator for other businesses while only browsing because the light is on.

Majority of the respondent are between the ages of 20-24, so this is key to the result pointing to the unemployment rate among the respondents.

For Cybercrime, majority of the cybercriminials target foreign people hence the low focus on Nigerians. The low level of ecommerce also is a pointer to the reduction in the cybercrime committed against Nigerians. Some of the prevailing cybercrimes are ATMs fraud, phishing and Identity theft. We have covered couple of the crime on this site.

The impact of the internet cannot be overemphazied as it has had great impact on people’s career and jobs.  More than 70% said it has impacted their careers.

The rise and rise of Facebook is a pointer to the social media adoption of Nigerian internet audience. Nigerians on Facebook recently crossed 1 million mark. About 57% spends between 1-5hours online while only 4% always update their social media status (what’s happening given the percentage of social media usage).

48% of the respondents have completed financial transaction online, wow! It’s a pointer that people are interested in ecommerce but more services are needed locally to spur the growth. Going by the respondents income level, I want to believe that most of the transactions are done in US dollars and on foreign sites (capital flight is still apparent here).

All these point to the fact that the need for local content is urgently needed as no local site have a presence in the research report. e-payment is the soul of e-commerce, the growth is still not fast enough as trust level is still very low locally. Technopreneurs coming to the Barcamp Nigeria should be thinking about these!

Our in-house research on “Emerging trends in Nigerian Internet Market” for 1st quarter of 2010 will be out in April.

Have you read the report? Click here to download it. What is your view about it?

Photo credit: Microsoft.

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I read from the experts, so some articles I may not be the one to write them personally but I sure will make sure I give you a usable read. This particular article was written by HongHai Shen, Engineer, a Googler. You can find the permalink here. So enjoy!

One of the things I work on is password security. And because I’m someone who pays close attention to passwords and how people use them, I sometimes hear interesting stories. For example, a couple of my colleagues are so careful about the security of their passwords that they generate a random eight-character string, memorize it, and then use it as their password for two to three months. After that time elapses, they start the process over again and generate a new random password.

Do we all need to be that careful about our passwords? Probably not. But passwords are one of the web’s most important security tools. Whether it’s for your Google account, your banking center, or your favorite store, choosing a good password and keeping it safe can go a long way toward protecting your information online.

So how do you choose a good password, and then keep it safe? A few of these tips can help:

• Avoid common elements when choosing your password. Specifically, you should avoid using words or phases from the dictionary, especially things that are easy to guess, like “password,” “let me in,” or the name of the site you’re logging into. You should also avoid using keyboard patterns, such as “asdf1234″ or “aqswdefr,” or personal information, such as birthdays, addresses, or phone numbers.

• Make your password as unique as possible. Once you’ve settled on a good base for your password, you should go a step further and add in numbers and non-alphanumerical characters, mix in upper-case letters, or use similar-looking substitutions for parts of the password, such as “$” for “s,” “1″ for “l,” and “0″ for “o.”

• Create different passwords for different sites. Doing so will help ensure that if one password is compromised, the others will remain secure. You may not be able to have a unique password for every place you visit on the web (for some of us, that would be a lot of passwords to manage), but alternating between a set of different passwords across the web and making sure all accounts that contain highly sensitive information (like email accounts or online banking accounts) have unique passwords is a good place to start.

• Don’t share your passwords with anyone. Not family, not friends, not anyone. This may seem a little strict, but the reality is the more people you share your password with, the greater your chances of having that password compromised will be. Also, if you need to write your passwords down, keep them away from your computer, and never send them in emails. And if you suspect someone might have discovered one of your passwords, change it immediately.

• Be careful how you share your information online. Some online services — such as social networking sites and gadgets that scrape information from other products — may ask you for a password or an API key. If you choose to use these kinds of services, take a few minutes to learn more about what they do to keep your sensitive information secure. And just like sharing passwords with other people, you should be aware that sharing this information increases the chances that it could be compromised.

Another thing that can help keep your password secure is choosing a good security question and answer on the sites that offer that option. You’ve probably seen this before: When you’re creating an account on many sites, you will be asked to choose a question to verify your identity if you forget your password.

Some sites will let you write in your own question; in these cases, you should make sure the Q&A you create isn’t something that’s easy to guess or something that your family and friends would know. Other sites will present you with a list of preset questions to choose from, such as “What is your mother’s maiden name?” These kinds of questions are less secure, as they’re easier for other people to guess the answer. In these cases, you should find a way to make your answer unique — whether it’s using the tips above, or by adding in other information — so that even if someone guesses the answer, they won’t know how to enter it properly.

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Interswitch the leading payment gateway in Nigeria, in fact has a near monopoly stronghold on the e-payment industry in Nigeria. Though, it is supposed to be the preferred gateway for online payments but has scared web merchants away with its exorbitant setup fee of N150, 000. Interswitch charges N150, 000 for setup fee, 1.5% per transaction and N2, 000 flat on transaction above N150, 000. I’d expected that it automatically transfer its presence on the card system to online but I must say, its strategy is not internet-business friendly.

2Checkout a top brand in online payment gateway accepts credit cards (Master card, Visa card, Discovery and many others) on its platform. The setup cost is just $49 and 5.5% + 55 cent per transaction which is still high but takes off the setup huddle.

It won’t belong that competitors grab the space with the development going on around the web space in Nigeria. I have spoken with couple of innovators and we should expect many more e-payment platform before the year end. We could even have a Nigerian M-Pesa before December. GTB (they have a discounted web pay platform that works fine with Interswitch) recently launched a master card powered debit card and gradually disconnecting from Interswitch.

Personally, I think the setup fee should not be more than N10, 000 while they make up the money from the commission from turn over on the site operating on their platform.

What do you think about Interswitch strategy? Do you think they will change soon or be forced to change by the market? How do you think new entrants with influence their decision?

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This post is a food for thought for my fellow technologist from Nigeria. Mobile Payment on the rise, Kenya and SA where is Nigeria?

Nigeria currently have more than 75million mobile phone users and no single viable mobile payment system to drive m-commerce in the country. I want to believe we have creative developers, sound investors and a ready market for the product but what is happening?

Our market will grow faster if people can pay for services as fast as they think about it! What should we do?

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Phishing usually involves cloning of reputable website to trick people into believing that they are on the right side, hence making they pass on sensitive data.

Naijacards.net says it gives you 15% discount on every card purchase from them. After choosing a card of your choice, you are asked to pay with your ATM card, which is hosted on their own site as oppose to interswitch’s secure site. See below;

Warn everyone you know to stay off this site as giving them your card details could give them access to your bank account.

Please drop below any phishing sites you have come across, let’s spread the word!

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