Stripe-owned Nigerian fintech startup, Paystack, has announced that it is expanding into one of Africa’s largest markets, South Africa.
Founded in 2015 by Shola Akinlade and Ezra Olubi, Paystack uses its API to help African businesses process payments from anywhere in the world.
In 2018, Paystack raised its first major funding round ($8 million Series A funding), led by Stripe (which eventually acquired Paystack). Its plan was to expand into other African countries with that funding round – first stop was Ghana.
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Expansion And Growth
Since expanding to Ghana, Paystack’s growth has been tremendous. It claims that it currently powers 50% of all online payments in Nigeria with around 60,000 customers, including small businesses, larger corporates ( MTN, SPAR, UPS, etc), fintech (Piggyvest), educational institutions, and online betting companies.
According to Shola, CEO of Paystack, “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. We’re excited to continue building the financial infrastructure that empowers ambitious businesses in Africa, helps them scale and connects them to global markets.”
Also, Paystack’s Product Marketer, Abdulrahman said “we ran a pilot in South Africa and worked closely with incredible developers and business owners. They helped us appreciate the local commerce landscape and deepen our understanding of your needs.”
Head of product expansion, Khadijah, added that “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, and making it a lot simpler for businesses to accept payments online, eliminating tedious paperwork, providing world-class API documentation to developers,
In that time, Paystack said it also helped hundreds of businesses (Tech startups, eCommerce stores, agencies, and creators) in South Africa accept payment online.
In conclusion, Paystack’s expansion to South Africa will not be so smooth, though. With already established brands likes of Yoco and DPO holding a large chunk of the market, Paystack will face stiff competition for market share.