Paystack acquires Nigerian microfinance bank, moves into full-scale banking beyond payments
By TechReportersNG
Paystack Inc., the Stripe-owned Nigerian fintech, has formally entered Nigeria’s banking sector following its acquisition of Ladder Microfinance Bank, a move that gives the company direct control over the funds it processes after more than a decade as a payments infrastructure provider.
The acquisition creates Paystack Microfinance Bank (Paystack MFB), a new deposit-taking institution that will operate alongside Paystack’s payments business, marking a significant expansion of the company’s role in Nigeria’s financial system.
Speaking to TechCabal, Amandine Lobelle, Paystack’s Chief Operating Officer, said the new bank would first focus on lending to businesses before expanding to consumers, while also providing banking-as-a-service (BaaS) products to companies building financial services and treasury tools.
“After 10 years of building payment infrastructure and going deep, we realised that businesses needed more than just getting paid to grow,” Lobelle said. “We wanted to leverage the expertise that we have built over the last decade to continue to address some of the pain points that businesses have.”
From payments to banking
The move is the latest step in Paystack’s shift into consumer-facing financial services, which began last year with the launch of Zap, its consumer payments app. With Paystack MFB, the company now has regulatory approval to accept deposits, giving it a stronger footing to offer lending and other financial products.
Paystack MFB will operate as a sister company to Paystack’s payments business and will be run independently under Paystack’s American parent company.
“The two entities will collaborate closely within the relevant regulatory framework but fundamentally have their own licences, governance, scope, products and services,” Lobelle said, noting that the separation reduces regulatory risk while allowing Paystack to test lending and deposit products without needing a full commercial banking licence.
Paystack currently processes trillions of naira every month for about 300,000 Nigerian businesses. With a banking licence, the company can now upsell tailored banking services to these merchants, increasing the revenue it earns from each customer.
The new bank will also allow Paystack to offer banking-as-a-service, lowering the barriers for companies to build banking products in Nigeria, similar to how Paystack simplified online payments for businesses a decade ago.
“By adding Paystack MFB to our family of brands, we’re finding the right balance through combining the rapid innovation of a tech-first platform with the stability of traditional banking,” Lobelle said.
A shift in where Paystack makes money
While Paystack became a core checkout layer of Nigeria’s internet economy, it previously depended on partner banks to hold funds. The microfinance licence moves the company into higher-margin parts of the financial stack, where small businesses feel friction most acutely.
Paystack MFB will now compete with a wide range of players, including traditional microfinance banks like LAPO, Accion, and Baobab; digital lenders such as Carbon and Fairmoney; and embedded-finance platforms like Moniepoint, OPay, PalmPay, and Kuda, all of which already combine payments, deposits, and lending.
Unlike digital-first banks such as Kuda, which started with deposits and consumer banking before adding credit, Paystack is approaching banking from the infrastructure layer upward, building on its payments backbone.
Although Paystack’s payments business currently relies on partnerships with commercial banks such as Titan Trust to process transactions, Lobelle said these partnerships will continue unchanged.
“The payments business is one of partnership and reliability. We have dozens of partners today in Nigeria. That doesn’t change.”
Regulatory context
In April 2025, the Central Bank of Nigeria fined Paystack ₦250 million ($190,000) for allegedly operating Zap as a wallet in violation of its licence. Lobelle said Paystack has since secured regulatory approval for Zap and that the fine had no impact on the approval process for Paystack MFB.
Paystack MFB will also operate independently from Brass, a business banking platform acquired by a Paystack-led investor consortium.
“Brass has its own team, investors. Just like any other financial services platform in Nigeria, Brass would be able to benefit from the banking-as-a-service services from Paystack MFB, but the two are independent,” Lobelle said.
Paystack’s lending strategy
Nigeria’s small-business financing gap is estimated at $32 billion, and Paystack sees payments alone as insufficient to address it. To lend at scale, a company needs deposits, regulatory approval, and control over settlement flows — all of which Paystack now gains through its microfinance licence.
Paystack MFB plans to offer:
- Working capital loans
- Merchant cash advances repaid from future sales
- Overdrafts
- Term loans
Although microfinance banks are not subject to the same loan-to-deposit rules as commercial banks, they still need deposits to lend. Paystack’s plan to attract business deposits is built around reliability, speed, and trust.
“By having consistently high uptime, and making Paystack MFB the fastest, most dependable way to move money in and out of their account or to access it,” Lobelle said, explaining how the company hopes to become the primary bank for Nigerian businesses.
Because Paystack already sees merchants’ real-time revenue through its payments platform, it can use live data to underwrite credit, speeding up loan approvals and improving risk assessment. The microfinance licence provides the regulatory backing and liquidity control needed to deploy that capital.
Lobelle added that Paystack has invested heavily in transfer infrastructure, achieving success rates close to 99%, with most transactions completing in seconds. Housing a bank alongside this infrastructure reduces reliance on legacy institutions for liquidity and compliance.
While revenue-linked lending carries risks and microfinance banks face limits on how fast they can grow their loan books, Paystack believes its transaction data gives it a sharper way to price risk than lenders who depend on monthly reports or collateral.
With Paystack MFB, the company is no longer just moving money — it is now positioned to hold it, lend it, and build new financial products on top of it, reshaping its role in Nigeria’s digital economy.
