From Payments to Banking: What Paystack’s MFB Move Says About Nigeria’s Fintech Future

Paystack is in the news again—and this time it is not connected to the suspension of its co-founder, but to a measured entry into Nigeria’s formal banking space.

Paystack is one of Nigeria’s most visible fintech success stories. Founded in 2015, it built its reputation as payments infrastructure that allows businesses to accept digital and in-person payments with ease. The company’s profile rose sharply in 2020 when it was acquired by Stripe, one of the largest fintech exits on the continent and a strong signal of international confidence in Nigeria’s technology ecosystem.

In its next phase of growth, Paystack has moved beyond payments by entering regulated banking through the acquisition of Ladder Microfinance Bank, giving it a Microfinance Bank (MFB) license. This  acquisition provides a more direct path into deposit-taking and lending under the supervision of the Central Bank of Nigeria.

Crucially, the new bank is expected to operate independently, with its own governance, balance sheet, and risk framework, instead of functioning as an extension of Paystack’s existing payments business. This structure aligns with regulatory expectations and reflects a broader industry shift toward separation between technology platforms and licensed financial institutions.

More broadly, Paystack’s move highlights how Nigeria’s fintech industry is maturing. The country no longer lacks financial institutions. What is increasingly missing is depth of capital, alongside robust credit systems capable of absorbing risk and supporting long-term growth. This is an area the CBN is actively addressing, particularly through recapitalization efforts among traditional banks.

Equally important is the need to strengthen data and privacy governance. As financial services become more data-driven, clear rules around data protection, customer consent, and responsible usage are essential to maintaining trust—especially as fintechs transition into roles that involve deposits and credit. There is also a growing case for a unified and interoperable open banking structure. Fragmented standards limit the usefulness of shared financial data. A coordinated framework—covering APIs, security, consent, and accountability—would improve credit assessment, reduce duplication, and help institutions serve customers more effectively.

Recent events have underscored why these foundations matter. Lidya, an SME-focused lender that had previously raised external funding, later announced it was winding down operations. Its exit highlighted the vulnerability of lenders operating with limited capital buffers and exposed how difficult sustainable credit can be in a volatile macroeconomic environment.

As Nigeria’s fintech sector evolves, the focus is shifting from rapid expansion to resilience and sustainability. The priority is no longer creating more financial institutions, but building well-capitalized entities, supported by strong regulation, sound data governance, and innovative credit systems—conditions necessary for confidently financing small and medium-scale enterprises, the backbone of the Nigerian economy.

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