Paystack: Payment Gateway for Online Businesses and Universities

Paystack is a payment gateway that enables online merchants in Nigeria, Ghana and South Africa to accept payments via credit card, debit card, and mobile money payments on their websites and mobile apps.

What is Paystack Payment Gateway?

Quick facts

  • Paystack was started in 2015 in Nigeria with the goal of disrupting the payment industry in Africa. Paystack founders are Shola Akinlade and Ezra Olubi.
  • In 2016, it became the first Nigerian company to enter Y Combinator.
  • Its platform processes 15% of all online transactions in Nigeria and its goal is to become the biggest payment processor in Africa. Currently, it is one of the fastest growing fintech companies in the country.
  • In October 2020, Stripe announced that it had acquired Paystack for $200 million.

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The Problem Paystack is Solving

Paystack’s mission is to help local and international companies, entrepreneurs, and schools accept payments online. This is a major problem in Africa, where most transactions are made using cash. In recent years, this is becoming increasingly important, as companies and governments move to accept these digital payments. The challenge is that most African companies don’t have the talent and capability to develop tools and platforms to accept these payments.

How Paystack is Solving This Problem

Paystack solves this problem by creating tools that enable companies of all sizes in Africa to accept payments on their websites and mobile applications. Paystack’s software is configured to accept all digital payments methods like debit and credit card, bank account, bank transfer, Visa QR, USSD, and mobile money.

With its technology, customers can start to accept these payments in less than 30 minutes. In addition, other organizations like schools and universities can easily collect fees from their students online. The company offers all these with a simple and transparent pricing structure. Paystack processes payments from MasterCard, Visa and Verve cards. Paystack South Africa can also process American Express cards.

“We are a payments company. We help merchants in Africa accept payments from their customers. Businesses will connect to Paystack, and almost immediately the customers can pay them with the credit cards, debit cards, and different payment methods.” Shola Akinlade

What Stage Paystack is In

Paystack is currently in the growth phase, where it is working to take market share in supported African countries. In this growth phase, the company has managed to take a significant market share in the Nigerian market, where it processes 15% of all online transactions.

By default, international payments are charged and settled to you in your local currency. Your customer’s bank is responsible for converting their currency and sending us the money in your local currency. However, there are some countries that are able to accept international payments in other currencies.

Paystack owners
In 2018 Paystack employers celebrated reaching the milestone of the amount of transactions with a value more than $27.5 million.

Paystack Fees

Paystack pricing is transparent and straightforward. The company only makes money when their customers make money from a successful transaction.

Paystack Nigeria Fees

Local transactions1.5% (of the total purchase amount) + NGN100 (₦100 fee waived for transactions under ₦2500/local transactions fees are capped at ₦2000, meaning that’s the absolute maximum you’ll ever pay in fees per transaction)
International transactions3.9% + NGN100
Transfers of NGN 5,000 and belowNGN10 per Transfer
Monthly fees0
Paystack payouts0

Paystack South Africa Fees

Local transactions2.9% (of the total purchase amount) plus ZAR1 (VAT inclusive)
International transactions2.9% (of the total purchase amount) plus ZAR1 (VAT inclusive)
Monthly fees0
Paystack payout0

Paystack Ghana Fees

Monthly fees0
Local transactions1.95% plus GHS 0
International transactions1.95% plus GHS 0
Transfer to mobile money and bank accountGHS 10 per transfer
Paystack payout0

Paystack Countries

Is there a Paystack in Kenya? Kenyan technology news website announced in May 2021 that following its launch in South Africa, Kenya might be the next market for Paystack.

Paystack supported countries are Nigeria, Ghana and South Africa. It plans on expanding to new markets. Enter your details here to know when Paystack is available in your country.

Paystack Funding

Paystack has raised more than $9.4 million since its founding. The company received seed funding of more than $1.3 million from a group of investors that included Tencent, Comcast Ventures, and Singularity Investments. It then raised $8 million from a group of investors like Tencent, Visa, and Stripe. Stripe is an interesting investor because it runs an exactly similar company in the United States.

Paystack Alternative

Paystack is not the first African company aiming to disrupt the payment processing industry. Other African companies in the industry are:

Paystack Location

Paystack was founded in Nigeria. Today, it has offices in Lagos, California and Johannesburg.

Final Thoughts on Paystack Payment Gateway

Paystack payment platform is one of the fastest growing fintech startups in Africa. The company has received funding from some of the best fintech companies in the world. As it expands to other African companies, the company will find increased local competition from the likes of Cellulant and Pesapal that have taken a considerable market share.

Further Reading

Kasper is co-founder of FiFi Finance. He holds an MSc in mathematics. He has travelled and worked across the globe, for various companies and non-profits, including CouchSurfing and Geekcorps Mali, Mercedes-Benz and the Dutch tax authorities. Being a co-founder of B2B Pay, he is our expert on investments, virtual banks and fintech. Read more about us.