E-commerce is fast becoming popular as brands make attempts to get closer to consumers and ease the purchase processes for goods. The trend seeks to make it possible for consumers to buy and pay for goods in the comfort of their homes.
Technology adoption and digitalization of economies is among the top priorities for most African countries, Zimbabwe included. The technology sector continues to have an increasing number of investors while the government is seeking to incorporate technology to their ambitions.
Zimbabwe e-commerce eco-system has not taken off as those of other African countries like Nigeria, South Africa, and Kenya. The cash crisis in the country has not helped the situation.
However, the trend, in regards to business, sector players say that implementation is not as easy as it sounds on paper.
Currently, online payments infrastructure is not reliable and frequent transaction failures meant that skepticisms around the new industry only worsened. Mostly the cost of transaction online is still very high and even the setup is high. Delivery logistics have also proven cumbersome with gaps in mapping and delivery cost.
Payment on delivery or payment before Delivery which is better for the Zimbabwe Small business owners.
Over the past few month, Techunzipped has set out time to study Payment on delivery and Payment before delivery to find out the best option for the Average eCommerce business owner in Zimbabwe.
Zimbabwe is currently in the throes of a deep dollar shortage, forcing banks to tighten measures. The introduction of local bond notes has not helped a bit, as some banks are giving as low as $20 bond notes.
Because of Zimbabwean past history on internet related business, not so many Zimbabweans are ready to part in their hard earn money before seeing the product. Hence the introduction of Kwenga by Steward bank will help in enabling Payment on delivery model.
Kwenga is a mobile POS that allows electronic payment transfers funds using credit and debit cards at retail outlets. Kwenga systems are equipped with features such as Wi-Fi, RFID, VoIP, and smart card capabilities. These systems are highly versatile and are used primarily as data devices.
E-commerce pioneers learned very quickly that, to stand any chance of short-term survival and long-term profitability, while trying to help Zimbabweans enjoy the convenience of online purchases, their businesses needed to solve another problem simultaneously: convenience of payments.
With the help of Kwenga, e-commerce start-ups will be to implement the payment on delivery model with easy. The average cost for an ordinary POS machine is $600 to acquire, but Steward’s Kwenga costs only $35 for the smaller device and $200 for the bigger one. The best thing about the Kwenga device is that it allows for up to 5 users to share one device and Steward bank can actually give a loan to buy the device.
Overall, payment on delivery would work very well in Zimbabwe where many people are still making their first orders online, penetration of online banking/credit cards/debit cards is pretty low and online usage of the same even lower. A lot of e-commerce stores dishing out pretty poor customer service/delay in shipping/delay in refunds etc does further harm to the overall image of the e-commerce industry. Customers end up not trusting anyone as a result!
There are loads of Advantages to Cash on Delivery (COD) for both the consumer as well as the retailer.
- The customer does not need to own a credit card to purchase.
- Impulse purchases may increase as payment is not due at the time of ordering.
- You can trust the company because you are paying after you receive the product at your doorstep.
While mobile wallets transactions are on the rise, when it comes to making online purchases, most of the buyers prefer Cash-on-Delivery payment model. And the low cast of Kwenga devices can help with the E-commerce revolution in Zimbabwe.
The government of Zimbabwe along with Reserve Bank has been trying their best to reduce cash transactions and boost digital payments to improve the economy.