Not #firstworldproblems

I belatedly discovered the hashtag #firstworldproblems, which is used to refer to things that are unique to completely developed nations, and that bear no relevance to the majority of the world's population. Via FriendFeed, I contributed a few of my own. One example:

In our Sunday School room, we had to put a sign on the coffeemaker warning people not to unplug it. If it's unplugged, the programming is lost.

It's a funny, silly game, but it proves a point. See if you can identify the major problem with this business plan. I made it up, but there are a lot like it out there.

The Powalarm(tm) addresses a basic human need that is found worldwide, thus enlarging the potential target market to billions of people. Because of extremely low manufacturing costs, it can be sold at an economical price, thus ensuring a large target market.

The Powalarm(tm) will be sold via the Internet and can be purchased with a credit card.

Perhaps many of us, when we read the last sentence, don't initially see the problem. Based upon our own personal experience, we see no problem with using the Internet to buy something (there is a 99.999% chance that if you are reading this post, you have Internet access), and many of us have credit cards or debit cards or Paypal or something that will allow us to make online purchases.

But that's not the case everywhere. Rob Salkowitz:

Many countries in Africa are among the world leaders in mobile banking, and growing numbers of Africans are becoming accustomed to using their ubiquitous mobile phones as payment and credit systems. Unfortunately, for consumers and businesses looking to participate in global e-commerce, the convenience ends at the border.

Part of the problem is indigenous. Most African banks are constrained by complex and opaque regulations governing foreign exchange transactions, and the majority of Africans do not have formal accounts in any case. Local money changers are not much help when it comes to bits and bytes.

In addition to these regulatory and infrastructure problems, there is a problem of perception when it comes to doing business in Africa. Salkowitz addresses this by noting that one country is responsible for 65% of all cybercrime. That country? The United States. (Nigeria is at 8%.)

Because of all of this, what's it like for Africans who want to purchase goods online? Not pretty.

Despite the low actual risk, perceptions and perhaps prejudices still predominate. Western-based merchants like eBay Inc. (Nasdaq: EBAY) and Amazon.com Inc. (Nasdaq: AMZN) are leery of shipping to most African countries. At best, the process involves costs and complexities foreign to customers elsewhere in the world. Some email systems preemptively ban IP addresses originating from countries like Nigeria purely on the basis of their spammy reputations, outraging legitimate businesses, citizens, academics, and other honest parties.

PayPal's reputation -- at least among those I’ve spoken to -- is the worst. "They make you wait forever, and that’s the best possible outcome," said one South African entrepreneur last month. "If there’s ever a complaint or dispute, they automatically assume the African is at fault and you won't get paid at all."

Salkowitz links to a post from the African blogger Hash that describes the situation:

I haven’t been able to use PayPal for two months. I just got profiled for extra security measures on Facebook. I can’t make certain purchases from Africa. Few organizations ship goods to me here.

Let’s be honest; living in Africa, or being African, gives you a certain unwelcome aroma in the eyes of global corporations. Frankly, we’re just not trustworthy....

This isn’t new to any of us who live, or spend a great deal of time, in Africa. You’re blacklisted, given extra screening, and generally treated like a second-rate human. You’re not trusted, and you’re not worth the time to figure out if you can be trusted.

Frankly, as a total continent-wide user base, we just don’t make enough of a blip on the radar to be worth their time. There’s not enough money here in their minds, there is lower-hanging fruit elsewhere with a lot more spending history – and therefore power.

(Oh, and if you're curious about Hash's views, go to the post and check out the title of his blog.)

But Hash has outlined two possible solutions:

First, we in Africa come up with our own payment and business solutions that work here first, and then interact with other global systems.

Second, the global corporates wake up and realize that there is quite a bit of spending power and money to be made in Africa, just like the mobile operators found out in the 90′s.

For me, I think the first scenario is more likely.