Paystack has entered Nigeria’s banking sector with the acquisition of Ladder Microfinance Bank. The deal gives the Stripe-owned fintech greater control over funds flowing through its platform after a decade focused on transaction processing.
The acquisition adds a banking layer to Paystack’s business-focused payments product and extends its push into consumer services. The bank, now renamed Paystack Microfinance Bank, will begin by lending to businesses before expanding to consumers.
Paystack also plans to offer banking-as-a-service products to companies building financial tools. These will include infrastructure for embedded finance and treasury management.
“After 10 years of building payment infrastructure and going deep, we realised that businesses needed more than just getting paid to grow,” said Amandine Lobelle, Paystack’s chief operating officer. “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.”
Securing the microfinance licence is the latest step in Paystack’s expansion into consumer-facing finance. That effort began last year with the launch of Zap, its consumer payments app, and now extends into deposit-taking and lending.
Paystack Microfinance Bank will operate as a sister company to Paystack’s payments business. Both entities sit under the same parent company but will run independently.
“The two entities will collaborate closely within the relevant regulatory framework but fundamentally have their own licences, governance, scope, products and services,” Lobelle said. The structure limits regulatory exposure while allowing Paystack to test lending and deposit products without the cost of a full commercial banking licence.
The bank strengthens Paystack’s control over money flowing through its network. The company processes trillions of naira monthly for about 300,000 Nigerian businesses, creating an opportunity to upsell tailored banking services and improve margins.
The licence also allows Paystack to lower barriers for companies building banking products through its BaaS platform. The approach mirrors how the company simplified online payments for businesses a decade ago.
Paystack’s move represents a structural shift rather than a product expansion. While payments positioned the company as a checkout layer for Nigeria’s internet economy, it remained dependent on partner banks to hold funds.
By contrast, bringing banking in-house allows Paystack to move into higher-margin parts of the financial stack. These are also areas where small businesses experience the most friction.
Paystack Microfinance Bank will compete with traditional microfinance banks such as LAPO, Accion, and Baobab, as well as digital lenders including Carbon and FairMoney. It will also face embedded-finance players like Moniepoint, OPay, PalmPay, and Kuda.
Paystack said existing partnerships with commercial banks will remain unchanged. “The payments business is one of partnership and reliability. We have dozens of partners today in Nigeria. That doesn’t change,” Lobelle said.
