E-commerce: coping with challenges and seizing opportunities

Author: Addison GOLO

E-commerce, defined as the process of buying, selling or exchanging products, services and information via the Internet, has become a key aspect of modern business. Initially in the 1970s, e-commerce was characterized by the use of electronic data interchange (EDI) and electronic funds transfer (EFT). The 1980s saw the rise of credit cards, ATMs, and telephone banking, and the Internet boom of the late 1990s and early 2000s revolutionized the way businesses and consumers engaged in online transactions.

In Ghana, the e-commerce landscape has developed significantly. However, the sector still faces challenges such as poor website design, limited browser compatibility, inadequate customer service, security concerns and underdeveloped communications infrastructure. These issues hinder the widespread adoption of e-commerce despite its potential benefits.

A recent survey of 100 Ghanaians (58 men and 42 women) provided insight into current e-commerce trends and perceptions. The results show that e-commerce is dominated by young people – 78% of users are aged 20-45 and only 18% are over 45. There is a noticeable correlation between banking experience and e-commerce awareness: 72% of respondents have been banking customers for six to ten years, and most of them are familiar with e-commerce. In contrast, only 10% of those with three years or less of banking experience were aware of e-commerce.

The main sources of e-commerce awareness are banks and mass media, followed by recommendations from friends and shopping malls. Among those familiar with e-commerce, 82% used at least one bank or payment card, highlighting the link between card use and e-commerce awareness. However, only 42% have used cards for online purchases, and 22% do so regularly. Despite this, 78% of respondents who had not used cards for online purchases expressed willingness to do so in the future.

Popular online purchases include groceries, bill payments, airline tickets and subscriptions. Respondents have a positive opinion about online shopping – 91% approve and see the benefits it brings to the Ghanaian economy. They emphasize the need for government and financial institutions to promote e-commerce through supportive policies and infrastructure development.

Recent trends highlight the transformative impact of mobile payment services on e-commerce in Ghana. Mobile money, with its accessibility, convenience and security, has significantly improved the e-commerce landscape. It has filled financial inclusion gaps, enabling previously underserved populations to participate in the digital economy. The widespread adoption of mobile payment services, driven by partnerships with e-commerce platforms, has streamlined payment processes and improved the overall shopping experience.

The integration of mobile money with e-commerce has led to increased use and adoption. Promotional incentives and discounts offered by mobile service providers further encourage users to use mobile payments for online purchases. Additionally, new payment methods such as QR codes, contactless payments and digital wallets are gaining popularity, providing consumers with more options and increasing the convenience of online transactions.

Despite this progress, challenges remain. To build trust among users, security issues, especially those related to fraud and data privacy, must be addressed. Improving the quality of e-commerce sites and improving customer service options are also key to supporting a positive online shopping experience. Additionally, investment in communications infrastructure is required to meet the growing demand for reliable internet connectivity.

The potential for e-commerce in Ghana is enormous. By addressing existing challenges and leveraging technological advancements, Ghana can position itself as a leader in the African e-commerce market. Collaboration between government, financial institutions and private sector stakeholders is essential to create an enabling environment for the development of e-commerce. This includes implementing supportive policies, investing in infrastructure and promoting digital skills among the public.

In the future, further development of mobile payment services and the adoption of new payment methods are expected to drive further growth of e-commerce. As technology evolves, mobile money will remain a cornerstone of the e-commerce ecosystem, driving innovation and inclusion in the digital age. By harnessing the potential of e-commerce, Ghana can achieve sustainable economic growth and participate more actively in the global digital economy.

The author is a digital payments and finance consultant: Areas of interest: use of predictive modeling in banking stress tests, payment risk and compliance, artificial intelligence, NLP, LLM, storytelling.

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