Paystack has crossed a major threshold in its evolution from payments provider to full-stack financial platform. The Stripe-owned Nigerian fintech has acquired Ladder Microfinance Bank, giving it a regulated banking vehicle that can hold deposits, issue loans and provide banking-as-a-service tools to other companies.

The deal marks Paystack’s most ambitious move since its acquisition by Stripe in 2020. For more than a decade, the company has focused on helping African businesses accept digital payments. Now, with a licensed microfinance bank under its control, Paystack is moving deeper into the financial stack where higher margins, stronger customer relationships and long-term growth sit.

The newly rebranded Paystack Microfinance Bank (Paystack MFB) will operate as a sister company to Paystack’s core payments business. While the two entities will collaborate, they will remain legally and operationally distinct, each with its own licence, governance structure and regulatory obligations.

According to Paystack’s chief operating officer, Amandine Lobelle, the bank will initially focus on serving businesses before expanding into consumer products. The plan includes working capital loans, overdrafts, merchant cash advances and eventually broader retail banking services.

Why Paystack is moving beyond payments

Paystack processes trillions of naira every month for more than 300,000 Nigerian businesses. That scale gives the company visibility into how money flows across thousands of merchants, but until now, it has relied on partner banks to actually hold customer funds.

That dependency limited how far Paystack could go. While payments made it a central layer of Nigeria’s internet economy, the most profitable parts of financial services such as deposits, credit and treasury management remained in the hands of traditional banks.

By acquiring a microfinance bank, Paystack is changing that equation. It can now keep funds on its own balance sheet, deploy capital through lending, and offer companies deeper financial tools such as account management, settlement services and embedded finance products.

This move follows Paystack’s growing push into consumer-facing services, which began with the launch of its Zap payments app. With Paystack MFB, the company now has the regulatory foundation to become a deposit-taking institution rather than just a payment intermediary.

Banking as a service for Nigeria’s fintech builders

One of the most strategic elements of the acquisition is Paystack’s plan to offer banking-as-a-service (BaaS). This will allow other startups and companies to build financial products on top of Paystack’s regulated infrastructure without needing their own banking licence.

It mirrors what Paystack did for online payments a decade ago, when it made it easier for developers and businesses to accept card and bank transfers. Now, the company wants to do the same for deposits, accounts and lending.

For Nigeria’s fast-growing fintech ecosystem, this could lower the barrier to launching new financial products, from digital wallets to payroll platforms and savings tools.

A new approach to small business lending

Nigeria’s small and medium-sized businesses face a massive financing gap estimated at more than $30 billion. Traditional banks struggle to serve this market efficiently, and many digital lenders rely on limited data to assess credit risk.

Paystack believes it has an edge because of its payments data. The company already sees how much its merchants earn, how often they are paid, and how stable their cash flow is. That gives it a powerful foundation for underwriting loans.

With Paystack MFB, the fintech can now combine that data with deposits and regulatory approval to lend at scale. Its loan products will include:

• Working capital loans for day-to-day expenses
• Merchant cash advances repaid from future sales
• Overdrafts and term loans for growing businesses

By linking lending directly to real-time transaction data, Paystack can price risk more accurately and approve loans faster than many traditional lenders.

Competition in a crowded digital banking market

Paystack is entering an already competitive field. Nigeria’s financial landscape includes long-established microfinance banks such as LAPO, Accion and Baobab, as well as digital lenders like Carbon and Fairmoney.

It will also face embedded finance giants like Moniepoint, OPay, PalmPay and Kuda, which already combine payments, deposits and lending at massive scale.

What makes Paystack’s strategy different is the path it has taken. While neobanks like Kuda started with consumer deposits and added payments later, Paystack is doing the opposite, starting with infrastructure and transaction processing before layering in banking.

That gives it a uniquely data-rich view of business activity, which could become a major advantage as it builds its loan book.

Regulatory backdrop and structure

The move into banking comes after increased regulatory scrutiny of fintechs in Nigeria. In April 2025, Paystack was fined ₦250 million for how its Zap app was initially operated, although the company later secured the necessary approvals.

Paystack has stressed that Paystack MFB will operate independently of both its payments business and Brass, a business banking platform backed by a Paystack-led investor group. This structure is designed to limit regulatory risk while still allowing close technical and commercial collaboration.

Importantly, Paystack’s existing partnerships with commercial banks for payments processing will continue, ensuring stability for its core checkout and settlement services.

A structural shift for Paystack

The acquisition of a microfinance bank is not just another product launch. It is a fundamental change in how Paystack fits into Nigeria’s financial system.

By controlling deposits, lending and settlement flows, the company is moving into the highest-value layers of financial services. For merchants, that could mean faster payments, easier access to credit and fewer points of friction. For Paystack, it means stronger margins and deeper relationships with its customers.

As Africa’s fintech sector matures, this deal positions Paystack not just as a payments company, but as one of the platforms shaping the future of digital banking in Nigeria.