Paystack, the Stripe-owned Nigerian fintech best known for powering online payments, has taken a decisive step into banking with the acquisition of Ladder Microfinance Bank, securing a regulatory licence that allows it to hold deposits, lend money, and offer banking-as-a-service (BaaS) in Nigeria.
The move marks a structural shift for Paystack after nearly a decade of operating as payment infrastructure for businesses while relying on third-party banks to store and move funds. With the newly formed Paystack Microfinance Bank (Paystack MFB), the company is positioning itself to control a larger portion of the financial value chain — from payment acceptance to capital deployment.
Why This Move Matters
Since launching in 2016, Paystack has processed trillions of naira annually for more than 300,000 Nigerian businesses. However, despite sitting at the heart of merchants’ revenue flows, the company remained dependent on partner banks for deposits and settlement.
By acquiring a microfinance bank licence, Paystack can now manage the entire lifecycle of money flowing through its platform — from the moment a customer pays a business to the point where those funds are reused as loans or working capital. This shift unlocks higher margins, deeper customer relationships, and new product lines that were previously out of reach.
According to Paystack’s Chief Operating Officer, Amandine Lobelle, the decision followed years of observing that businesses needed more than payment acceptance to grow. Lending, treasury management, and reliability of access to funds have become key pain points for Nigerian SMEs.
A Platform Play, Not Just a New Product
Paystack’s banking entry reflects a broader platform-building strategy common among global fintechs.
First, it represents vertical integration. Instead of renting banking infrastructure from partners, Paystack is now buying and operating its own regulated rails — similar to how other fintechs are acquiring data, compliance, and banking layers to reduce dependency and friction.
Second, the focus on lending is deliberate. Payments are typically low-margin and highly competitive. Lending, by contrast, is where fintechs generate sustainable profits. Paystack MFB plans to begin with business-focused products such as working capital loans, overdrafts, merchant cash advances repaid from future sales, and term loans — before expanding into consumer credit.
Third, Paystack is turning its licence into a product. Through its BaaS offering, other startups will be able to build financial products, treasury tools, and embedded-finance solutions on top of Paystack MFB’s regulated infrastructure, mirroring how Paystack simplified online payments a decade ago.
How Paystack Plans to Lend Differently
Nigeria’s SME financing gap is estimated at over $30 billion. Paystack believes its advantage lies in data. Because it already sees merchants’ real-time payment flows, it can underwrite loans using live revenue data rather than static bank statements or collateral, enabling faster approvals and more precise risk pricing.
While microfinance banks still face growth caps and deposit requirements, Paystack’s scale, uptime reliability, and near-instant transfer rails give it a strong foundation to attract business deposits and deploy capital efficiently.
A New Competitive Arena
Paystack MFB will compete with traditional microfinance banks like LAPO and Accion, digital lenders such as Carbon and FairMoney, and embedded-finance giants including Moniepoint, OPay, PalmPay, and Kuda. Unlike many of these players, however, Paystack is approaching banking from the infrastructure layer upward, rather than from consumer banking downward.
In essence, Paystack is no longer just enabling transactions — it is becoming a financial platform. The acquisition of Ladder Microfinance Bank signals that the company is ready to play in the higher-margin, more complex layers of Nigeria’s financial system, where control over money, not just movement of it, defines long-term value.
