Nigerian payments platform Paystack has launched operations in South Africa after a six-month pilot, with the country becoming the startup’s third market in Africa and first new destination since its acquisition by Stripe.
Launched in January 2016 by Shola Akinlade and Ezra Olubi, Paystack is a payments company that helps businesses in Africa get paid by anyone, anywhere in the world. The startup processes over 50 per cent of all web payments in Nigeria, powering payments for over 60,000 organisations, including FedEx, UPS, MTN, and many others, and is also active in Ghana.
This announcement is coming seven months after it was acquired by fintech giant Stripe for $200 million. In 2018, when it raised $8 million Series A it planned to use it for its Ghana expansion. Following the launch, Paystack will leverage South Africa’s internet connectivity, one of the highest on the continent, to significantly drive up the adoption of digital transactions. Today, despite the country’s impressive connectivity and high smartphone penetration, digital payments account for less than half of all transactions.
“South Africa is one of the continent’s most important markets, and our launch here is a significant milestone in our mission to accelerate commerce across Africa,” says Paystack CEO, Shola Akinlade. “We’re excited to continue building the financial infrastructure that empowers ambitious businesses in Africa, helps them scale, and connects them to global markets.”
According to Techcrunch, The South African launch was preceded by a six-month pilot, which means the project kickstarted a month after Stripe acquired it. During this phase, Paystack reportedly worked with different businesses and has grown a local team to handle on-the-ground operations.
“For many businesses in South Africa, we know that accepting payments online can be cumbersome. Our pilot in South Africa was hyper-focused on removing barriers to entry, eliminating tedious paperwork, providing world-class API documentation to developers, and making it a lot simpler for businesses to accept payments online,” says Khadijah Abu, Paystack’s head of product expansion.
Stripe is gearing toward a hotly anticipated IPO and has been aggressively expanding to other markets. Before acquiring Paystack, the company added 17 countries to its platform in 18 months, but none from Africa. Paystack was its meal ticket to the African online commerce market, and CEO Patrick Collison didn’t mince words when talking about the acquisition in October.
“There is an enormous opportunity. In absolute numbers, Africa may be smaller right now than other regions, but online commerce will grow about 30% every year. And even with wider global declines, online shoppers are growing twice as fast. Stripe thinks on a longer time horizon than others because we are an infrastructure company. We are thinking of what the world will look like in 2040-2050,” he said.