How a local payment processing company plans to catch hold in Africa
One localized payment company wants to become the main payment processor for Africa’s emerging economy.
Paystack, a Nigerian payment processing company founded in 2015, has 17,000 merchants under its belt, and accounts for 15 percent of all online payments in Nigeria. Emmanuel Quartey, the company’s head of growth, said flagship customers include Taxify, a ride-sharing app similar to Uber, and MTN, a large African telecommunications company. Though Paystack now operates exclusively in Nigeria, Quartey said plans are in the works to “quietly” test operations elsewhere. Options include Kenya, Ghana and South Africa.
The goal for Paystack, which now has 35 employees, thanks to a $10 million round of financing that closed in August, is to one day do business with all of Africa — a growing economy worth $3.5 trillion, according to IMF data.
Its customers are already able to accept payments from outside the country in different currencies. In an effort to diversify its income, Paystack is also testing offline payments in Nigeria, like one of its investors, Stripe.
Paystack has a worthy local competitor in Paypal, which has 600,000 accounts in Sub-Saharan Africa. But Thad Peterson, an analyst at Aite Group who covers mobile and emerging payment methods, said the cash-based economy presents a challenge for the eBay-owned company. Though Paypal has similar cash-based services they don’t make up a bulk of its payment processing business. Alternative payments have been slow to catch on in Africa because it was only a decade ago when many consumers gained access to bank accounts, breaking away from decades of a cash-based system.
Such access is a major boon to African retailers, who for the first time are able to sell goods and services to international customers via Paystack, opening up a global market share.
Unlike Paypal, which redirects online purchases through its website before returning the buyer to the business to complete the purchase, Paystack integrates natively. The consumer never sees it, only the checkout process Paystack enables and operates.
“We definitely find that’s a thing that merchants really enjoy — that customers are still within their branded experience and don’t need to go anywhere,” Quartey said.
“They’re positioned really well to broaden out across Africa,” Peterson said. “The beauty of their platform is it really is tender-agnostic. It doesn’t matter if it’s in Nigeria or Kenya or anywhere. Whatever currency, whatever market or payment type, they can manage.”
As the African economy continues to grow, with the World Bank forecasting a 3.6 percent growth rate by 2019, Paystack is “well positioned” to grow along with it, Peterson said.
“It’s really moving the payment space very, very quickly to a pretty sophisticated place, which is Paystack, and at the same time, it’s adding needed lubrication to the economy because suddenly money has velocity,” he said.
Cheat Sheet: Shopify’s Shop Pay integration will share customer purchase data with Google
Allowing retailers to sell for free, and adding more payment options, makes Google itself more of a shopping tool.
LG kicks off series of live stream shopping events produced in-house
If a consumer sees something they like, they can click on the product and will be taken out to the LG website to complete their purchase.
Loyal and App-y: How QSRs are leaning into rewards programs to boost mobile orders and sales
Brands were forced to find ways to reach customers in their homes and fast-food restaurants, including McDonald’s and Burger King, found answers by investing in loyalty programs.
SponsoredHow advertisers can tell the difference between banner blindness and ad-aware consumers
Aditya Padhye, general manager, Trestle at eyeo Advertising is part and parcel of daily life –– from billboards in the street to smartphone apps, its presence is unavoidable. While some advertising strikes a chord with people, there are certain ads that have the opposite effect. Increasing internet usage among all demographics, higher demand for sales […]
Cheat sheet: Etsy beats earnings, turns focus to adding more revenue sources
Etsy is still growing beyond a blast of mask sales last year and now needs to manage 4.7 million sellers and 90 million buyers.
Member ExclusiveDespite hungry VCs, DTC brands are rethinking their fundraising approach
This is the latest installment of the DTC Briefing, a weekly Modern Retail column about the biggest challenges and trends facing the volatile direct-to-consumer startup world. Join Modern Retail+ to get access to the DTC briefing–as well as all articles, research and more. Before 2020, some founders and investors were starting to warn that most consumer […]