Paystack is a Nigerian fintech startup founded in 2015 by Ezra Olubi and Shola Akinlade. The company processes payments with its API and is actively operational in Nigeria and Ghana.
Paystack has been in the shadows for the past few months after it was purchased by Stripe in October 2020. The fintech startup has crept out of the shadows with its announcement of expanding into South Africa.
In its Series A funding round that occurred in 2018, Paystack raised the sum of $8 million and the plan was to use this for its Ghana expansion. As at 2018, Paystack was already processing about 15 percent of Nigeria’s online payments. More than 10,000 businesses were using Paystack for transactions. With its $8 million seed fund, the startup moved into Ghana.
According to Paystack, since its expansion into Ghana it has been processing at least 50 percent of Nigeria’s online payments. The startup also announced over 60,000 customers that are made up of other fintech startups, online betting companies, educational institutions, small businesses, large corporate businesses, etc. Businesses like SPAR, UPS and MTN use the platform to collect payments worldwide.
According to reports, Paystack’s launch into South Africa began with a six-month pilot phase. Reports also mentioned that this pilot stage likely started immediately after the startup was acquired by Stripe. Reports mentioned that Paystack leveraged the pilot stage to build a team to handle the on-ground operations and have formed some form of partnerships with businesses.
Paystack plans to take the over the booming e-commerce opportunities in Africa and with Stripe’s backing, this is feasible. Regarding the startup’s expansion in South Africa, here’s what the Head of Product expansion; Khadijah Abu had to say- “For many businesses in South Africa, we know that accepting payments online can be cumbersome. Our pilot in South Africa was hyper-focused on removing barriers to entry, eliminating tedious paperwork, providing world-class API documentation to developers, and making it a lot simpler for businesses to accept payments online”
Stripe has been aggressively expanding to other markets and added 17 countries to its platform in a period of 18 months; no African market has been explored by Stripe by that time. By acquiring Paystack, Stripe is indirectly and efficiently capturing the African e-commerce space.
“There is an enormous opportunity in absolute numbers. Africa may be smaller than other regions, but online commerce will grow about 30 percent every year. And even with wider global declines, online shoppers are growing twice as fast. Stripe thinks on a longer time horizon than others because we are an infrastructure company. We are thinking of what the world will look like in 2040-2050”, Patrick Collison; CEO of Stripe said last year while talking about Paystack.
With Paystack successfully launched in Nigeria, Ghana and South Africa, it leaves us wondering what country the startup plans to expand to next. Kenya? Ethiopia? What do you think?