E-commerce can help MSMEs pull through crisis; payment solutions pose challenge – Minister

Minister for Commerce, Trade, Tourism and Transport Faiyaz Koya (middle) seen in this file picture with Vodafone Fiji acting CEO Ronald Prasad (left) and Bram Peters during the launch of the VitiKart app at the Vodafone Fiji headquarters in Tamavua, Suva. Picture: JONACANI LALAKOBAU/FT FILE

While e-commerce may offer a platform for micro, small and medium enterprises (MSMEs) to pull through this global crisis, the main challenge, however, is payment solutions with financial institutions.

This is because MSMEs with limited capital are not able to afford fees required by commercial banks.

Fiji’s Minister for Commerce, Trade, Tourism and Transport Faiyaz Koya made these remarks at the virtual Validation Workshop for Pacific Regional E-Commerce Strategy and Roadmap on Wednesday, acknowledging businesses in those categories have been the hardest hit during this COVID-19 crisis.

But he says MSMEs must embrace e-commerce, which at the onset of the pandemic had assisted some MSMEs to remain in business.

He adds e-commerce is critical for international trade, and it is also transforming the way in which the world trades.

“Fijian businesses and consumers that were able to ‘go digital’ have helped mitigate further economic downturn,” Mr Koya said.

“Thus, digital uptake has enabled businesses to respond quickly to the extreme disruption and permitted them to foster new business designs and better position themselves for resilience.”

In his address, the Minister said this island nation had been leveraging over two decades of investment in ICT infrastructure, and its location as the hub for transportation routes within the Pacific.

That, he said complements Fiji’s efforts of business reforms that “has not only promoted competition amongst telecom operators, but created a conducive environment for e-commerce to grow”.

But payment solutions for e-commerce remain a challenge with financial institutions, he adds.

“The MSMEs with limited capital are not able to afford onerous fees required by commercial banks.

“In Fiji, if a business went to the bank to set-up a payment portal, the banks will demand a security deposit of $20,000.”

Mr Koya said that limitation in accessing e-payment solutions was a major factor that was not able to move the local market from cash payments.

To help MSMEs build greater resilience by accessing the e-commerce platform, the Government had announced – in the 2021-2022 national budget – a number of incentives.

In collaboration with the Reserve Bank of Fiji, the Government will assist MSMEs that sign up as a merchant to offer their products for sale online on Vodafone’s ‘Vitikart eCommerce’ platform.

Mr Koya says a sum of $1.2million has been allocated to fund the costs associated with getting MSMEs onto the VitiKart platform that receives payment through internet payment gateways.

“The Vitikart eCommerce platform is integrated with M-PAiSA mobile wallet, Visa and Mastercard payment gateways. This means that businesses signing up on Vitikart will not be required to make any investment in any online payment solutions to offer their products for sale online.”

Further support has been provided through a 200 per cent tax deduction incentive for investments in development and upgrade of online shopping platforms.

And those incentives will be further complemented by the tax incentives for companies that will land network cable and undertake associated infrastructure development in Fiji to bring faster internet speeds, at even lower costs, he said.

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