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Fintechs in Nigeria: Paystack

Paystack is one of the more well-known fintechs in Nigeria. They help companies build the platforms they need to collect and receive funds from a variety of local and global payment channels.  

It’s a big role for any startup to play in a country like Nigeria where numerous businesses adopt digital payments all the time. Because customers now demand convenient ways of paying for the products they purchase, local companies have to provide online, card, and mobile payments channels.

But with electronic systems, there’s always the risk of failed transactions, and the inconvenience that comes with it. It’s a problem that many local businesses still face.

Paystack takes on these concerns with a product that supposedly improves on existing payments systems. The startup guarantees fast executions for transactions carried out on its platforms, tailoring every package to fit with the needs of each user-company or industry.

Products and Services

At the base of Paystack’s product offerings are its APIs (Application Program Interfaces), which developers use to build software applications for payments. There are APIs for money transfers, transaction authorization, and identity verification, to mention a few. With these ‘building blocks’, developers can build lending, savings, and mobile wallet apps.

As a result, Paystack fashions the systems with which businesses can collect and send out funds. They can make single or bulk transfers to their customers’ bank accounts. Users get smart alerts that prevent them from sending money to the wrong destinations. Every transaction is recorded in a way that makes reconciliation easy. Purchasing patterns can also be detected and retrieved, providing businesses with the data they need to make informed decisions.

Customers’ identity can be verified through BVN, mobile, and bank account details. The platform also has advanced fraud detection which spots fraud risks and enables its users to plug potential security breaches.

Paystack in the News

Since its founding in 2015, Paystack has grown to become one of Nigeria’s leading fintech startups. It’s currently responsible for almost 20% of merchant transactions over digital channels in Nigeria.  

Paystack’s clients include other fintech concerns, education institutions, and transport companies. It has powered payments for companies like Dominos, Bolt (formerly Taxify), AXA Mansard, GUO, and Carbon (formerly Paylater). A total of over 40,000 businesses have been served by its solutions in the past four years.

There’s been global interest in Paystack’s work, with outlets like Forbes and CNN reporting on their emergence.

The startup has also been supported by investment from global Venture Capital, in a couple of funding rounds. The first, $1 million in seed funding, came in 2016. Another one, valued at $8 million, was announced in 2018. These investments have aided Paystack’s efforts to scale its operations.

Featured image source: Paystack

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Ikenna Nwachukwu

Ikenna Nwachukwu holds a bachelor's degree in Economics from the University of Nigeria, Nsukka. He loves to look at the world through multiple lenses- economic, political, religious and philosophical- and to write about what he observes in a witty, yet reflective style.

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