Paystack Inc., the Stripe-owned Nigerian fintech giant, has officially entered Nigeria’s banking sector through the acquisition of Ladder Microfinance Bank, marking a strategic shift after a decade of focusing primarily on payments. This move gives Paystack greater control over the funds flowing through its network and positions it to offer a broader range of financial services.
The newly acquired entity, now branded Paystack Microfinance Bank (Paystack MFB), will initially focus on lending to businesses before expanding into consumer banking. It will also introduce banking-as-a-service (BaaS) solutions for companies building financial products, alongside treasury management offerings.
Amandine Lobelle, Chief Operating Officer at Paystack, stated:
After 10 years of building payment infrastructure and going deep, we realised that businesses needed more than just getting paid to grow. We wanted to leverage the expertise we’ve built over the last decade to address some of the pain points businesses face.
From Payments to Banking: A Strategic Evolution
Securing a microfinance banking licence represents a significant milestone in Paystack’s expansion into consumer-facing financial services. This journey began last year with the launch of Zap, its consumer payments app, and now advances with regulatory approval to operate as a deposit-taking institution.
Paystack MFB will function as a sister company to Paystack’s core payments business, operating independently under Stripe’s ownership.
“The two entities will collaborate within the regulatory framework but maintain separate licences, governance, and product scopes,” Lobelle explained. This separation allows Paystack to experiment with lending and deposit products without the cost or scrutiny of a full commercial banking licence.
Why Banking Matters for Paystack
Paystack processes trillions of naira monthly for over 300,000 Nigerian businesses, but until now, it relied on partner banks to hold funds. By adding a banking layer, Paystack can upsell tailored banking services to its existing merchant base, increasing margins and reducing friction for businesses.
The acquisition also enables Paystack to lower barriers for creating banking products in Nigeria through its BaaS platform, mirroring how it simplified online payments a decade ago.
Lobelle said:
By adding Paystack MFB to our family of brands, we’re combining the rapid innovation of a tech-first platform with the stability of traditional banking.
Paystack MFB enters a crowded market, competing with traditional microfinance banks like LAPO, Accion, and Baobab, as well as digital-first lenders such as Carbon and Fairmoney, and embedded-finance players like Moniepoint, OPay, PalmPay, and Kuda.
Unlike digital-first banks that began with consumer deposits and later added credit, Paystack is approaching banking from the infrastructure layer upward—starting with payments and now moving into deposits and lending.
Credit Strategy and Lending Products
Nigeria’s small business financing gap is estimated at $32 billion, and Paystack aims to close part of this gap by rolling out:
- Working capital loans for immediate operating expenses
- Merchant cash advances, repaid from future sales
- Overdraft facilities
- Standard term loans
Paystack’s payments arm already provides visibility into merchants’ revenue flows, enabling real-time underwriting based on live transaction data rather than static financial statements. This approach shortens approval times and improves risk modeling.
While microfinance banks face caps on loan book growth, Paystack’s ability to price risk using transactional data gives it an edge over lenders relying on collateral or monthly reports.
Regulatory Context and Partnerships
In April 2025, Paystack was fined ₦250 million ($190,000) by Nigeria’s Central Bank for allegedly operating Zap as a wallet without proper licensing. Lobelle confirmed that regulatory approval for Zap has since been secured and that the fine did not affect conversations around Paystack MFB.
Paystack MFB will operate independently of Brass, a business banking platform acquired by a Paystack-led consortium, though Brass may leverage Paystack’s BaaS services.
Existing partnerships with commercial banks, such as Titan Trust, will remain unaffected.
Lobelle emphasized:
The payments business is one of partnership and reliability. We have dozens of partners today in Nigeria. That doesn’t change.
By combining its payment infrastructure with banking capabilities, Paystack is positioning itself to become the primary financial partner for Nigerian businesses, offering fast, reliable money movement and access to credit. With success rates near 99% for transfers and most transactions completing in seconds, Paystack aims to make Paystack MFB the most dependable way for businesses to manage funds.
The acquisition signals a structural shift for Paystack—from being a checkout layer for Nigeria’s internet economy to owning critical parts of the financial stack where higher margins and deeper customer relationships reside.
