Six years after Stripe’s acquisition, Paystack is moving beyond online checkout through banking, consumer finance and acquisitions as it seeks the deposits and interest income that payments alone cannot provide.
Six years after Stripe bought Paystack in a deal valued at more than $200 million, the Lagos fintech looks very different from the payments company Stripe first backed. What began as a business helping merchants take money online has become a broader financial group with a microfinance bank, a consumer app and an expanding set of acquired businesses, underscoring how African fintechs often have to evolve beyond pure payments to find lasting profit. Stripe said at the time that it wanted to accelerate online commerce across Africa, where Paystack already served more than 60,000 businesses and handled more than half of Nigeria’s online transactions.
That original model was elegant but limited. Paystack earned a fee each time a business completed a transaction, taking 1.5% plus ₦100, capped at ₦2,000. On a ₦10,000 order, the company would make about ₦250, or roughly 19 cents. Useful at scale, that kind of revenue depends on constant payment flow; it does not produce the kind of sticky, low-cost funding that banks enjoy when customers leave deposits sitting in accounts. For that reason, payments companies across the continent have increasingly been drawn towards banking, where they can earn interest on balances as well as fees on transactions.
The broader economics of the sector help explain why. Nubank in Brazil, often held up as a model for digital finance, ended 2025 with $41.9 billion in deposits, funded itself at 87% of the interbank rate and reported $2.9 billion in profit. McKinsey has said interest income accounted for 46% of global payments revenue in 2024, a reminder that holding money can be as valuable as moving it. Paystack’s own shift has followed that logic, even as the company has had to navigate the regulatory and operational complexities that come with taking deposits rather than simply processing payments.
Stripe’s backing allowed Paystack to expand across West and Southern Africa, with operations in Côte d’Ivoire, Ghana, Kenya, Nigeria and South Africa, plus approvals in Egypt and Rwanda. It also recruited beyond the continent, including in Dubai. But the wider footprint brought fresh pressures. As African currencies weakened, revenue earned locally translated into less in dollar terms, while costs in stronger currencies became more painful. By November 2023, the naira had lost more than half its value since June, and the Kenyan shilling had fallen almost 20% over 12 months. Paystack responded by laying off 33 staff in Europe and the United Arab Emirates.
The company also adapted to changing customer behaviour. In Nigeria, bank transfers accounted for 34% of Paystack’s payments in 2023, up from 12% in 2021, reflecting a growing preference for cheap and reliable transfers over cards. Paystack introduced pay-with-transfer in 2020, then added Virtual Terminal in 2023, a product that gives merchants a Paystack-Titan bank account into which customers can transfer money. That created larger balances under Paystack’s umbrella, though the interest on those funds initially flowed to Titan Trust Bank rather than to Paystack itself.
The importance of deposits became clearer in 2024, when Paystack led a consortium that bought Brass, a business banking start-up that had struggled to meet withdrawals after October 2023. Two people familiar with the matter said Brass faced a ₦2 billion shortfall in its books. The deal gave Paystack an early stake in a company that held customer funds, and it also offered a lesson in how fragile confidence can be when depositors worry about access to their money. Ten months later, in March 2025, Paystack launched Zap, its first consumer app, again with deposits held at Titan.
That move drew the attention of Nigeria’s central bank. By the end of April, the regulator had fined Paystack ₦250 million after finding that Zap was being run like a wallet, according to a person with knowledge of the matter, even though Paystack held only a payments licence at the time. A payments licence allows a company to move money between accounts, but not to hold customer funds in the way a wallet or deposit-taking product does. Zap later obtained regulatory approval, and in January 2026 Paystack bought Ladder Microfinance Bank, renaming it Paystack MFB. The company said the bank would initially lend to businesses before expanding to individuals.
Paystack then moved to formalise the shift into a wider corporate structure, creating The Stack Group shortly after the bank acquisition. The company said payment volume had grown more than twelvefold since 2020 and that the group was profitable. In June, Brass said it would close as a standalone business and migrate customers into Paystack MFB. In August, Allawee, a card company Paystack acquired quietly in 2025, told customers their accounts would close on 1 December and that they would need to open new ones with Paystack.
The strategy is clear enough: if payments are the entry point, deposits are the prize. Yet Paystack begins this race with a handicap. Rivals such as Moniepoint say they serve more than 6 million active businesses through an extensive physical network, while OPay and PalmPay have built dense agent systems that bring fintech services into markets and streets across Nigeria. Those businesses benefit from repeated face-to-face contact, which helps turn an occasional transaction into a lasting balance. Paystack, by contrast, was built on online checkout. Its strength has always been the merchant that integrates once and then stays connected digitally, not the trader signing up through an agent on a corner.
That makes the next phase more difficult, not less. Buying Brass and Allawee gives Paystack access to existing customers faster than building a deposit base from scratch, but it still must persuade users to leave money in its ecosystem rather than treat it as a place to pass funds through. Stripe acquired a company that was fast at moving money. The real test now is whether Paystack can become equally good at keeping some of it.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
