NAIROBI, Oct 25 (Reuters) - PayPal, the payments servicesarm of eBay, has entered a partnership with one of eastAfrica's biggest lenders, Equity Bank, to tap into thefast-growing African economies.
African states, enjoying annual economic growth averaging 5percent, have lagged developed counterparts in the adoption ofelectronic commerce. But companies such as online retailerJumia, a would-be African Amazon, are eyeing the market.
Efi Dahan, Paypal's regional director for Africa and Israel,said the company was looking for triple-digit growth on thecontinent, without providing specific numbers.
"We understand the potential of this market and we willdefinitely extend the business in other countries," Dahan toldReuters at an event to sign the deal on Friday.
He said the California-based business entered South Africathree years ago and they were pleased by the growth there.
Showing the growth potential, James Mwangi, Equity Bank'schief executive, said Kenya's share of e-commerce transactionswas less than one percent of all trade transactions, whilee-commerce in South Africa was 4 percent of the total.
Mwangi, whose bank is the largest by customers in Kenya,said he hoped the bank would be allowed to offer the services tothe rest of east Africa, where Equity runs outlets in Tanzania,Rwanda, Uganda and South Sudan.
The service links PayPal online accounts with accounts atthe bank, allowing shoppers and merchants to buy and sell acrossthe globe through the Internet.
Mwangi said those who sign up for the service, like localtravel and leisure firms offering safaris online, will haveaccess to a market of 137 million PayPal users.
"By merely registering, one gets into a market that islarger than the east African population," he said referring tothe 120 million people who live in the region.
Firms offering electronic commerce services on the continentface obstacles like a lack of proper, precise addresses, whichhinder the delivery of goods bought and paid for online.
Still, a company like Jumia is betting that it can propel amiddle class out of the street markets and straight onto itswebsites, it said on Thursday.
Equity also expects the millions of Kenyans abroad to tapthe PayPal service, raising its share of the remittancesbusiness to 30 percent from 16 percent in a year, Mwangi added.
Remittances are the fourth-largest source of foreignexchange in east Africa's biggest economy after revenue fromtea, horticulture and tourism. A total of $1.17 billion was sentback to Kenya by its citizens abroad last year.
- east Africa
- South Africa
- electronic commerce