Paystack reaps big from payments pivot 

Bank transfers have become the leading method for online transactions in Nigeria, surpassing traditional card payments. In 2023, over half of all transactions processed by Paystack, a Stripe-owned Nigerian fintech company, were conducted via bank transfers, doubling from the previous year.

Data from Paystack reveals that bank transfers accounted for 58% of transactions in Nigeria in 2023, a significant increase from 28% in 2022. Card payments made up 36% of transactions, while internet banking and other payment methods represented 4% and 2%, respectively.

Paystack introduced the bank transfer option in 2017, initially supporting seven financial institutions. Its popularity has surged, particularly following the launch of virtual terminals in October 2023, which enable merchants to accept bank transfer payments for multi-person businesses. Additionally, the introduction of Paystack-Titan virtual accounts, through a partnership with Titan Trust Bank, reduced the latency of bank transfers to less than eight seconds.

“Bank transfers are fast becoming the go-to payment method for a growing number of consumers in Nigeria,” said Shola Akinlade, Paystack CEO, in an October 2023 interview with TechCabal. In a low-trust environment where instant payment confirmation is crucial, bank transfers offer a reliable solution.

Paystack’s strategic focus on non-card payment alternatives is evident in the launch of a direct debit product in November 2023, allowing businesses to charge customers’ bank accounts directly. The largest single transaction on Paystack in 2023, amounting to ₦261 million, was processed via direct debit.

This shift towards bank transfer payments highlights Paystack’s effort to streamline transactions by bypassing debit cards, which often incur additional costs for merchants and users. By developing fintech products that integrate directly with consumers’ bank accounts, Paystack aims to offer more efficient and cost-effective payment solutions.