The companies Stripe and Visa, along with other firms, are investing $8 million in the Nigerian company Paystack.
Paystack is similar to Stripe in that the Lagos-based company allows developers to create payment tools via its APIs. Paystack allows its customers to build online payment features, and it enables people to connect multiple payment processors by handling transactions for consumers.
Paystack was founded only two and a half years ago, so this investment announcement is rather promising.
Many African countries have been seeking to improve and expand its digital payments and eCommerce capabilities. Alibaba Group Holding’s founder and chairman, Jack Ma, stated that the company “will do anything to share technology” with Africa.
In an effort to aid African entrepreneurship, Ma stated that he has set aside a $10 million fund and is investing in more favorable tax conditions for eCommerce startups.
The Ceo of Stripe, Patrick Collison, added:
“The Paystack founders are highly technical, fanatically customer oriented, and unrelentingly impatient. We’re excited to back such people in one of the world’s fastest-growing regions.”
The Future of Paystack
Paystack currently processes about 15 percent of all online payments in Nigeria, Africa’s largest economy. In an interview, Paystack CEO and Co-founder Shola Akinlade stated that one of the company’s main goals is speed.
“How fast can we help connect businesses?” Akinlade says, “As Paystack looks to expand rapidly across the continent, we’re thrilled to have the benefit of the deep experience of Stripe, Visa, and Tencent. Our ambition is to give African merchants the tools and services they need to go toe-to-toe with the best businesses in the world, and win.”
Though Paystack’s market is located in one of the African continent’s fastest growing regions, the company’s home country is experiencing a decline in banked adults. According to Bloomberg, Nigeria’s financial inclusion declined by 4 percent between 2014 to 2017.
“There is a lot of (payments) volume happening” in Nigeria, Akinlade said during the interview. “There are a lot of transactions. Very few of those transactions happen online, but it’s still early.”
Paystack is also attempting to become more accessible to its customers. By Western standards, Nigerian literacy rates are relatively low. This means that the company needs to simplify its products in order to reach as many merchants and consumers as possible.
Despite these challenges, Akinlade is still hopeful for the future. He cited that “as recently as 2015, it was really difficult for a developer or business owner in Nigeria to quickly start accepting online payments.”
He continued, stating:
“We started Paystack because we believe that better payments tools are one of the most important things that African businesses need to unlock their explosive potential. We think of Paystack as an amplifier of the incredible work that African business owners are already doing. With better technology tools, African businesses can be better equipped to play a growing role in the global economy.”
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