There could not have been a better time for Nigeria’s booming fintech sector than when the COVID-19 pandemic forced the world indoors in early 2020. State governments, in a panic, closed down physical markets, forcing millions of Nigerians for the first time. The country’s biggest payment platforms at the time suddenly found themselves sitting on an extensive transaction infrastructure and millions of merchant relationships. That interesting situation led them to one logical conclusion: why should they not be more than just payment platforms? And that logic unsurprisingly led almost all of them to one solution: E-commerce.
According to Abubakar Idris, tech journalist at Techcabal, by the start of June 2020, Flutterwave launched its Flutterwave Store, allowing merchants to set up digital storefronts in minutes. Remita, not wanting to miss out on what they felt was a juicy opportunity, also joined the fray. Interswitch leveraged its Quickteller platform to deepen e-commerce functionality. OPay launched OMall and OTrade. And in a moment that felt like a declaration of war, payments unicorn Paystack announced Paystack Commerce with an ambitious roadmap promising invoice features, sales analytics, and integrations that would transform it into a sophisticated global shopping tool.
It is 2026 now, and all of them have all quietly moved on from those initiatives as if they never happened. E-commerce? What is e-commerce?. OPay shuttered OMall and OTrade after only a few months of operation. Moniepoint focused on its payment processing instead. Flutterwave Store launched briefly, then fluttered out (pun not intended), never to be heard about again. The great e-commerce race of 2020 was abandoned, and like the disciples of Jesus Christ initially after his death, the players retreated to their comfort zone, the payment infrastructure space.
So how did such a promising e-commerce race peter out so anti-climatically? And what lessons does that saga teach us about e-commerce in Africa’s largest economy?
A few months ago, a friend and I got lost on our way to a wedding somewhere in Ogun State. We had set up Google Maps to guide us, of course, but he took a wrong turn at some point, and we got so hopelessly lost that even Google, that all-knowing seer of everything, became as clueless as we were on how to get back on our route. In our moment of despair, we turned to the tested and trusted method that had been bred into us millennials before Google Maps became a thing, rolling down the glass and asking locals for directions. That incident painted a stark picture of a fundamental issue with the Nigerian market that even the most data-rich fintechs in the country had underestimated.
The first and most punishing obstacle was logistics. Nigeria ranks 88th on the World Bank’s Logistics Performance Index, and the gap between digital ambition and physical reality has never been more exposed than in e-commerce execution. Poor road networks, chronic traffic congestion, particularly in Lagos, unreliable electricity, and a fragmented, informal addressing system made last-mile delivery expensive, slow, and unpredictable. Delivery companies described navigating deliveries through WhatsApp voice calls and landmark descriptions because formal addresses were often nonexistent or unreliable. Even Jumia, the largest and best-funded e-commerce operation on the continent with over a decade of operation, had managed to penetrate less than one percent of the Nigerian retail market.
For payments companies that had built world-class digital infrastructure, the physical logistics problem was not a software challenge they could iterate away. It required warehousing, fleets, rider networks, and operational depth that had taken dedicated logistics startups years to build at high cost. Plugging into third-party logistics providers added cost and reduced control over the customer experience, precisely the area where e-commerce businesses live and die.
Consumer trust was a compounding issue. Nigeria was, at the time, and largely still is, a cash-preferring economy, with a high tendency towards disintermediation. Surveys consistently showed that a significant majority of Nigerian consumers preferred cash on delivery for online purchases, citing concerns about product quality, fraud, and the inability to inspect goods before payment. Cash-on-delivery created a different set of logistical nightmares: riders carrying cash, order cancellations at the door, and the constant friction of managing physical money across a dispersed delivery network. It fundamentally undermined the digital payments value proposition that these companies were built upon.
There was also the question of market timing versus market readiness. The behavioral changes the pandemic triggered were real, but they were not as permanent or as deep-rooted as the big players. As lockdowns eased, Nigerians, as they have done throughout the country’s economic history, demonstrated a remarkable and rational preference for informal, physical commerce. The Alaba markets women, the Balogun traders, the Onitsha merchants: these networks were resilient, trusted, and embedded into how commerce actually flowed. The pandemic had forced a temporary detour. When the roads reopened, most consumers and merchants, just like my friend and I when we got lost that day in Ogun State, simply went back to the way they were taught to do it before “tech”.
The Aftermath
What emerged from the wreckage of the e-commerce experiment was a more honest reckoning with where value was actually being created in the Nigerian economy. As the likes of Opay and Moniepoint learned and quickly adjusted their business to fit, offline businesses were not waiting to go to online stores. They were waiting to continue their offline business online, but with better payment tools, they were finding them not in online stores, but in point-of-sale terminals, mobile money transfers, and agency banking networks.
Between 2020 and 2023, Nigeria experienced a quiet revolution in offline payments. Mobile money operators and POS transfers, which accounted for roughly 13 percent of consumer payment volume in 2020, had grown to over 40 percent of all transactions by 2023. The fintechs that read this shift earliest, notably OPay and Moniepoint, built massive agent networks that digitized cash at the point of transaction rather than trying to re-create the Shopify model. Moniepoint, which had pivoted from enterprise banking software just before the pandemic, scaled its POS network across thousands of small and medium businesses. OPay rewired its entire strategy around peer-to-peer transfers, consumer wallets, and merchant acquiring, building a financial services super-app rather than a storefront.
The Future of E-commerce in Nigeria
The structural conditions that defeated the 2020 wave are shifting, even if slowly. According to a 2025 report by the United States of America International Trade Administration, Nigeria’s logistics sector, valued at around $2 billion in 2024, is projected to grow to $3 billion by 2029, driven by investments in road, rail, and port infrastructure. A new generation of tech-driven logistics startups is building last-mile solutions adapted specifically to Nigerian conditions — not copies of Western models but innovations born of the texture of Nigerian roads, addresses, and consumer behavior. Social commerce, driven by Instagram, TikTok, and WhatsApp, is creating a low-infrastructure path to digital selling that is already scaling organically, bypassing the need for formal marketplace platforms altogether.
According to a 2025 e-commerce report by Temidayo Ojo, CEO of Jumia Nigeria, fintech companies are now better positioned than they were in 2020 and in a different position. OPay, Moniepoint, and Paystack now sit on vast offline merchant networks and consumer financial relationships. If logistics infrastructure gaps are bridged and as consumer trust in digital transactions deepens, these companies will be far better placed to layer commerce back onto their financial systems.
But will the next e-commerce wave look like the 2020 model, which assumed Nigerians would migrate to formal online storefronts? Current evidence suggests that’s not happening in the near future, even if the logistics infrastructure does catch up. In my piece about why B2C services keep failing in Nigeria, I noted that Nigeria, as an emerging market, is a highly disintermediated society. As such, commerce will stay where Nigerians have always conducted it, in communities, through relationships, through informal networks, and payments technology will meet it there. That is not the Shopify story. It is something more distinctly Nigerian, and it may ultimately prove far more durable than anything a lockdown could have manufactured.
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