I have always said that the number one reason why the Nigerian tech industry is still in the doldrums is because of the lack of a proactive e-payment gateway. So I was extremely excited to hear about a new e-payment service called eyowo. It’s exciting because it allows developers to provide pipes to the major e-payment processors in the country i.e. Etranzact, Interswitch and MasterCard all in one location.
For their business model, they charge a 1% transaction fee, which is pretty low, but my only grouse is their one-off integration fee of #50,000. To the developers who might be able to afford it, it’s not expensive but to other who might not, its extremely prohibitive. for me, i would advise that the fee be scraped for the following reasons:
1. Barrier of entry: This one-off fee would probably be the number one and major reason why most developers or interested parties wont sign up for their service. For a new company with no track record, they should make adoption of their service as painless as possible and scraping the sign up fee is one way to do it.
2.Economy of scale: they should focus on getting as many adopters as possible. if they drop the one-off fee and increased their per-transaction fee to 2% or simply dropping the per-transaction model entirely and adopting an overall transaction fee of 2.75% similar to Square’s model, it would still make economic sense because the more adopters they have, the more transactions they would process and they more revenue they would be able to generate via transaction fees.
Right now, I am very excited about eyowo’s service and would be keenly watching how it goes with them.
 Most starts ups here in Nigeria are probably generating little or no revenue talk less of even being ramen-profitable. So every single penny counts to them. So the very idea of splashing such an amount on integrating a payment gateway might not seem such a wise one. But if it was free??? then adoption rate would shoot through the roof.
Disclaimer: I am in no way involved with eyowo.com.