Following foreign exchange issues that had some users being charged over the actual fares their receipts displayed, Uber announced cash payments in Lagos. Lagos is now the third African city, after Cairo and Nairobi, to have the cash payment option.
Uber, being a global company, appears to operate a foreign account that receives payments from Nigerian users in dollars. The downside to this is that recent devaluation of the Naira against the dollar is weighing heavily on the customers and some local banks are taking advantage of the unstable exchange rates to overcharge customers.
Thankfully, not all banks are in on the loot and so unaffected users have continued with the card payment option. However, as it turns out, a few of them have been experiencing issues requesting rides, as is confirmed in a newsletter sent by Uber Lagos this morning:
We are aware that some riders have been experiencing widespread payment issues with the Uber app recently.
A number of banks have specifically began declining Uber transactions and so as a result, you may have tried to request an Uber but received the following message: [your credit card ending xxxx has been deemed invalid. Please update your billing settings ] or an outstanding balance was left on your account due to a payment decline.
While a number of banks are exempt from said issues, Uber is already taking extra steps to work around it. A hint at a possible mobile payment option was dropped in the same newsletter:
We are currently working with various partners to launch solutions that sustain the Uber cashless experience you know and love.
We already know one of these potential partners is Paga because its CEO and founder, Tayo Oviosu tweeted about it moments ago:
— Tayo Oviosu (@oviosu) January 19, 2016
It's easy to see why Uber is going with Paga. Paga is arguably Nigeria’s largest mobile payments company. With a network of over 8,850 agents across Nigeria and a user base of over 3.4 million, Paga has processed over 17 million transactions, worth over a billion dollars in the space of 3 years.
Paga could easily become for Uber Lagos what Mpesa has been for Uber Nairobi. However, judging by the content of the newsletter, there's a possibility that other mobile payment players will be granted similar partnerships.
I think the real question here is why will Uber not do the necessary and open a local bank account for receiving payments in Nigeria. What do you think? Would you be comfortable using Paga to pay for your Uber rides?
Be the smartest in the room
Uber has confirmed cashless payments with Paga:
We are thrilled to announce an innovative collaboration with Paga – the money transfer service in Nigeria. Through this partnership, riders in Lagos can pay for their cash trips through their mobile phone. By simply visiting the mobile site or downloading the Paga app, riders can still enjoy the convenience of cash free payments.
You can find out more about cashless Uber payments with Paga here.