OurPass Raises $1M Pre-Seed for One-Click Checkout in Nigeria

Streamlining Online Shopping: Introducing OurPass

Consumers frequently engage in online purchasing, utilizing a wide range of e-commerce platforms and subscription services. However, the repetitive need to log in to various websites and stores can be a significant inconvenience. A simplified and expedited logging and checkout process across preferred online retailers would undoubtedly enhance the shopping experience.

Addressing a Gap in the African Market

While the U.S.-based startup Fast is addressing this need, its services are currently limited in Africa. Recognizing this opportunity, OurPass has emerged to develop a tailored solution for the African market.

Securing Seed Funding for Expansion

The Nigeria-based startup, positioning itself as the “Fast for Africa,” has successfully secured $1 million in pre-seed funding to facilitate its expansion throughout the country. This funding round was spearheaded by Tekedia Capital, alongside contributions from angel investors associated with Fortune 500 companies.

The Root of the Problem: A Personal Observation

Founder and CEO Samuel Eze’s understanding of the e-commerce checkout challenge stems from a personal experience. He observed his mother’s difficulties navigating online shopping, repeatedly creating accounts and enduring complex checkout procedures.

“I witnessed my mother’s struggles with online shopping, as she established numerous accounts on different platforms and navigated lengthy checkout processes,” Eze explained in an interview with TechCrunch. “Frequently, she would abandon the transaction and explore alternative online stores. Observing similar patterns among friends and family, I investigated further and discovered that this was a widespread issue for both consumers and retailers.”

The Prevalence of Cash on Delivery in Nigeria

Nigeria’s e-commerce landscape remains heavily dependent on cash on delivery. As recent as 2019, a survey revealed that 70% of Nigerian consumers preferred this payment method over online payment options.

A Shift Towards Digital Payments

However, this preference is gradually evolving, thanks to the efforts of companies like Paystack and Flutterwave, which are simplifying online payment collection for merchants.

According to Statista, card payments now account for 27% of all online transactions on e-commerce sites, surpassing cash and bank transfers as the most common method.

The Persistent Checkout Challenge

Despite the growth of digital payments, checkout processes continue to pose a significant hurdle for merchants. Approximately 75% of online shopping carts are abandoned annually due to lengthy forms and the need for repeated logins.

OurPass: A One-Click Solution

OurPass aims to resolve this challenge with a mobile application that enables one-click shopping. When users initially register on the OurPass platform, they provide their names, email addresses, and shipping details.

OurPass then generates a unique identity for each customer, which is seamlessly shared across all online stores they patronize.

“We have developed an identity layer for the web, allowing consumer identity information to be transmitted to every online store during checkout,” Eze stated.

The Ecosystem Approach: A Unique Strategy

This means OurPass customers will no longer be required to complete forms or repeatedly log in. However, this functionality is currently limited to merchants who have integrated the OurPass API into their platforms, presenting a considerable undertaking.

The decision to build its own merchant and consumer ecosystem raises the question of why OurPass didn’t adopt Fast’s approach, where only merchants need to install the Fast Checkout system, and users can access the service through any e-commerce website.

From Card Details to a Wallet System

Initially, OurPass permitted users to enter their payment card details directly during the checkout process, without requiring an application download. However, frequent instances of payment gateways flagging cards used by OurPass customers and resulting in failed transactions prompted the company to adopt a wallet-based strategy and develop a dedicated application.

“We didn’t want to compromise our core value proposition of one-click checkout by allowing consumers to experience failed transactions due to flagged cards,” Eze explained. “This led us to create a wallet system to ensure a seamless one-click checkout experience.”

Virtual Account Numbers for Secure Transactions

This system assigns both consumers and merchants virtual account numbers within a secure wallet. To complete a purchase, consumers fund their wallets, and funds are then transferred to the merchant’s wallet upon checkout. Eze emphasizes that this approach enables OurPass to capture value throughout the entire transaction and provides instant payment settlement, unlike traditional payment gateways.

Building a Merchant Network

OurPass has already onboarded a number of merchants onto its platform, with a significant portion being small businesses utilizing Storemia, an online storefront provider recently acquired by OurPass.

The company also intends to collaborate with merchants on popular e-commerce platforms such as WooCommerce, Magento, Squarespace, and Shopify, as well as social commerce platforms like WhatsApp, Facebook, and Instagram.

Additional Benefits: Free Delivery

In addition to one-click checkout, OurPass offers free delivery on all orders, partnering with logistics companies like MAX.ng and Gokada to fulfill this commitment.

Revenue Model and Future Plans

The company, which is one year old, charges a transaction fee of 0.8%, capped at N1,000 (~$2) for merchants, and a 5% commission on each product sold. Eze also indicated plans to introduce subscription options in the future.

Looking Ahead: Growth and Expansion

Since its beta launch in May, OurPass reports having processed $500,000 in transaction value and anticipates continued growth, aiming to become the leading consumer checkout platform in Nigeria by 2023.

Eze stated that the funds will be allocated to technology development and team expansion, with a goal of reaching 200 employees by the end of next year.