PayPal is a service that allows one to make payment online without sharing ones card detail each time one is making a payment. The benefit of owning a PayPal account goes beyond being able to make secure payments online, one can also receive/send money from/to other PayPal accounts.
All that is required for a PayPal account to be opened is a functional email address. Once the email address has been used to open the PayPal account, the next thing will be to verify the account in order to start using it.
PayPal has been closed to Nigerians for a while until now. While they have only enabled the option of making payments using PayPal for accounts opened in Nigeria, a personnel at PayPal mentioned to me that the other features are coming depending on how Nigerians respond.
How do you open a PayPal account?
To get a PayPal account, visit www.paypal.com/ng and sign up using an email address. Once your email has been verified and you set up your own password, the next thing will be to add a credit/debit card where money can be drawn from.
Once you have opened a Paypal account, you will notice that that your PayPal balance is reading 0.00. PayPal can draw money from the debit card you integrate to it. How does this work?
Let’s say I want to buy an item on eBay and I chose to pay using PayPal. I will be required to input my email address and password. Once that is done, PayPal charges my card. From the look of things, PayPal draws the money from my bank account (card is tied to my bank account) and pays it to the merchant (on eBay). If I had a balance on my PayPal account, there won’t be any need for PayPal to draw the money from my card. I can’t receive money directly to my PayPal account just yet, so, that option is closed to Nigerians for now.
What this means is that a 0.00 PayPal balance won’t stop you from making a purchase using your PayPal account from websites that receive PayPal as long as long as you have verified your account by connecting a valid credit/debit card.
The First Bank of Nigeria Advantage
It is worthy to note that, in Nigeria, PayPal has struck a partnership deal with First Bank of Nigeria (FBN) that allows interested FBN account holder the ability to open a PayPal account and be instantly verified.
Question: Does it mean that FBN customers without a card (credit/debit) can still use PayPal in Nigeria? “No.”
Is it that my FBN account is automatically tied to my PayPal account? “FBN customers still need to have a card to link to their PayPal account.”
Verve Card issued in Nigeria is not accepted internationally. You won’t be able to tie your Verve Card to your PayPal account. The Visa and MasterCard issued in Nigeria will however work. The card that I tied with my PayPal account is the one that is issued by Guarantee Trust Bank PLC—GTBank.
In the future, once PayPal starts allowing businesses to integrate PayPal, and a website like Konga/Jumia integrates it, you’ll be able to shop securely on those sites using your PayPal account without revealing your card details to those online stores. You do not pay any charge using PayPal—only the merchants are charged.
Question: how does PayPal make its money? As a user I’m not charged, right? Then who is charged?
“PayPal never charges customers for their purchases. PayPal charges merchant fees from the merchant or the person who receives the money. It is possible to send money to PayPal accounts outside of Nigeria (in countries where PayPal accounts can receive funds). In that case, the sender can determine who would pay the fee. It is done within a user’s PayPal account for each transaction.”
What can you do with your PayPal account once you open it?
If you open a PayPal account in Nigeria today, please note that the only things you can do is to buy from online stores that have already integrated PayPal—like Uber, eBay and the like and PayPal users outside Nigeria that have already been enabled to receive money. You won’t be able to receive money from another PayPal user just yet. You’d have to wait for a later time when PayPal will roll out that feature to the Nigerian market.
FBN customers get another edge here again. They will be able to move any money from their PayPal balance to their bank account.
Question: if all Nigerian customers can’t receive money into their PayPal account, is the situation different for FBN customers—will they be able to receive money into their PayPal account?
“Unfortunately NG (Nigeria) PayPal accounts cannot receive funds into them yet – that includes FBN customers.”
Nigerian businesses are yet to be invited to the party too—they will have to look on for a while. But, Dobox, a Nigerian online store has already integrated PayPal—they have integrated it long before PayPal set foot into the Nigerian market. I was able to pay for their service with my NG PayPal account.
Dobox is able to do that because they set up their PayPal account outside Nigeria. Another Nigerian company that receive PayPal that I have see is IrokoTV.
There are certain rules about how payment-processing companies in Nigeria should operate. These rules won’t affect PayPal just yet as they’re not banking in Nigeria and don’t receive money in Naira. I am wondering how things will be if a rule by CBN mandates them to do that and if they’ll still be able to store credit card details once they open full operation in Nigeria and started allowing local businesses to receive PayPal as a means of payment online and offline.