Paystack, the Nigerian fintech owned by Stripe, has moved into banking with the acquisition of Ladder Microfinance Bank, giving it the ability to hold deposits and lend after a decade focused on payments.
The acquired lender will operate as Paystack Microfinance Bank, a sister company to Paystack's payments business. The bank will start by lending to businesses before expanding into consumer products, according to the company. It also plans to offer banking-as-a-service products to fintechs and businesses building financial tools.
Paystack said the move reflects demand from its merchant base for services beyond payments. The company processes trillions of naira each month for more than 300,000 Nigerian businesses and now aims to offer them deposits, credit, and treasury products.
The bank will run independently, with its own licence and governance, while collaborating with Paystack's payments arm within regulatory limits. Existing partnerships with commercial banks used for payment processing will remain unchanged.
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The acquisition follows Paystack's recent push into consumer services, including the launch of its Zap payments app, and marks a shift toward higher-margin parts of Nigeria's financial stack.
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Key Takeaways
Paystack's move into banking signals a structural shift rather than a simple product extension. Payments made the company a core checkout layer for Nigeria's digital economy, but left it dependent on partner banks to hold funds and settle transactions. By adding a microfinance bank, Paystack gains control over deposits, liquidity, and lending, areas where margins are higher and where small businesses face the most friction. Nigeria's SME financing gap is estimated at $32 billion, and access to real-time payment data gives Paystack an edge in underwriting credit using live cash-flow information. The strategy contrasts with digital banks that started with deposits and retail accounts before adding payments. Paystack is approaching banking from the infrastructure layer upward, using payments data to inform lending and treasury services. Competition will be intense, spanning traditional microfinance banks, digital lenders, and embedded-finance players that already combine payments, deposits, and credit. Still, owning a banking licence allows Paystack to reduce reliance on legacy institutions and test new financial products while staying within lighter regulatory bounds than a full commercial bank.
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