We Hate Interswitch So Much That We’re Going To Disrupt Them

Just so we’re clear, I don’t actually hate Interswitch. That would be like the average Lagosian saying they hated Molues six years ago. There was nothing to hate, just a question of whether you wanted to commute or not. For most people in Lagos, it was either that Molue (pictured above), or you wouldn’t get to work. Of course we all know how well that particular dinosaur of Lagos transport has fared since Fashola introduced his fancy BRTs and dedicated bus routes.

I consider Interswitch similar to Molues in that they are both lumbering, rickety giants. But that is as far as the similarities go, because while Molues are actually cheap and provide lots of utility for the masses, compared to alternative means of transport, Interswitch products cost an arm and a leg, and are often crapware.

Which is why I couldn’t help letting out a loud guffaw when my attention was drawn to this article, which reports that Interswitch plans to make it easier and cheaper for small businesses to accept online payments by slashing the rates of connecting to its payment gateway. The word on the street is that this sort of connection costs NGN150,000. Interswitch is promising to bring it down to as low as NGN50,000, for SMEs. Let’s give them a round of applause, shall we?


50k, and they think they are doing local SMEs a favour? That is unmitigated BS, if you ask me. Especially when there are other companies offering the same service who not only do it better, but cheaper, with all sorts of value added toppings. Heck, some do it for free, making money only on transaction charge percentages or flat rates.

Take for instance, Eyowo, their basic plan costs NGN6,000 a year. I suspect they’ll have to review their rates soon, because of services like MiMo, which should launch to the public shortly. MiMo demoed their online and mobile payments product and API to the developer community at the Co-Creation Hub last week and I almost did a double take when they said there would be ZERO setup costs for the merchant-facing product. But ideally this should be a free service in the first place. Paga already offers a FREE online checkout service. I could cite more examples, but long story short — if I were an SME right now, I would tell Interswitch to take their product and shove it up, you know, somewhere.

Oh, I almost forgot to add that to qualify for this Interswitch bonanza, the intending SME is required to go through some convoluted registration process via the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN). Wow, it’s that easy, really? And I guess the rest of us “non-SMEs” (because we aren’t registered with SMEDAN) are ineligible for Interswitch’s welfare package, we’ll just have to cough up the standard 150k if we want to accept payments online, no? And upon on top of that, the lucky SMEs who fall into the technophobe majority will still have to pay/beg/blackmail the unfriendly neighbourhood geek to help with the API integration. Lord have mercy.

Maybe I could have tolerated how the whole scheme drips with condescension if it weren’t much like a welfare shelter specifically designed to fleece the poor hobos who come in.

Just as the unruly Molues were indispensable to Lagos’ transport infrastructure, Interswitch’s emergence was a leap for the Nigerian tech and finance ecosystems, and as they grew, we were willing to tolerate their shortcomings as part of the process. But those benign shortcomings have since graduated into full-scale tyranny, ranging from stingy API policies, to extortionate pricing regimes, to plain old refusal to innovate.

But guess what? Life is too short to deal with difficult AND expensive online payment collection solutions, especially in Nigeria when you have other, myriad business hazards to worry about. This foreign analogy might not exactly run parallel to ours in factual respects, but the tyranny of a near ubiquitous online payments product gone bad is exactly why WePay is trying to kill the PayPal button, by making online payment acceptance as easy as embedding a YouTube video, literally. Already, the people who should know have begun to say why they think PayPal is on its way down. If Interswitch doesn’t watch itself, it’ll go down for largely the same reasons too.

I have come to the end of this rant, and all I have left to say to Interswitch is no problem, stay there and continue dulling. We all know where the few surviving Molues on Lagos roads are headed for. The scrap yard. Whenever Interswitch pulls shit like this, I can’t help wondering if that is where it wants to go too. It looks as though Nigerian e-commerce is just getting off the ground in earnest, but Nigerian merchants have been practically screaming for online payment solutions that aren’t designed to screw them over since 2009!.

Three years later, Nairaland geeks are still trying to make sense of Interswitch’s API. In fact, I already know what the title of my next post should be — five (or more) great Nigerian online payment services that totally kick Interswitch ass. Stay tuned.

And uh, Interswitch? Take a good look at the future and weep.

PS: If you think your online payments solution kicks ass, you should hit me up here, let’s talk.
PPS: Kehers has just pointed out to me that these other Interswitch “alternatives” also need to integrate with Interswitch. Now ain’t that a bitch?

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