Amazon Web Service, a global leader in cloud services with presence in Nigeria has said its customers in the country can now pay for its services in Naira.
The company said this became imperative to help its customers cut costs associated with foreign exchange and localize payment experience.
According to a statement from AWS, the Nigerian Naira is one of the eight new currencies to be accepted for payments, a development that would save costs for many Nigerian companies using AWS services.
Other local currencies now being accepted by AWS include Chilean Peso (CLP), Colombian Peso (COP), and Uruguayan Peso (UYU). Similarly, AWS Europe customers can pay in Egyptian Pound (EGP), Polish Zloty (PLN), Romanian Leu (RON), and Ukrainian Hryvnia (UAH).
Why AWS is shifting to local currencies
Explaining the reasons for its latest decision to start accepting local currencies as against the dollar, AWS said:
“Local currencies are important in localizing the payment experience for customers. With payments in their local currencies, customers can avoid foreign exchange costs associated with making foreign currency payments.
“Also, it removes payment friction for customers in countries where local regulations put limits on the foreign currency amount a customer can access.”
Local competition
AWS’ decision to embrace local currency payment may also not be unconnected with the rise of local players offering cloud services in Naira, an option which would be more convenient and affordable compared to services that would require them to look for foreign exchange.
- Throughout 2024, local cloud providers such as Nobus, Layer3, and Okra’s recently launched Nebula, were positioning themselves to get their slice of the market from the three leading cloud providers in the country, which include AWS, Microsoft, and Google.
- The significant drop in the value of the Naira has also made it difficult for companies earning in Naira to subscribe for foreign services that they would have to pay for in dollars.
- Many Nigerian startups and commercial banks are currently using AWS cloud services and the acceptance of local currency will lift a huge burden of sourcing for dollars from them.
AWS in Nigeria
AWS opened its first office in Lagos in November 2022 as part of part of its support for the growing number of customers and partners in Nigeria.
The company said the office was to support organisations of all sizes, including startups, enterprises, and public sector agencies as they make the transition to AWS cloud.
In January 2023, WS launched its AWS Local Zones facility in Lagos to reduce latency and improve performance for Nigerian businesses, which is an important factor since many Nigerian companies host their services in AWS’s European region due to geographical proximity.