Paystack Inc., the Nigerian fintech owned by Stripe, has formally entered Nigeria’s banking sector following the acquisition of Ladder Microfinance Bank, marking a major shift for the company after more than a decade focused on payment processing.
The acquisition gives Paystack greater control over the funds that move through its platform and positions the company to expand beyond payments into deposits, lending, and other regulated banking services. The development was confirmed on Wednesday through a post on X, where the company announced the new entity with the message, “Hello 👋 We’re Paystack MFB. Built to help customers move, store, and grow money with confidence.”
The new bank builds on Paystack’s steady expansion from a Nigeria-focused payments product into a broader financial platform operating across five African countries. While the company initially focused on helping businesses accept online payments, the banking licence adds a new layer to its business-focused product stack and strengthens its push into consumer and business financial services.
According to Amandine Lobelle, Paystack’s chief operating officer, the newly acquired microfinance bank will start by serving businesses before expanding its offerings to individual consumers. Paystack MFB will also provide banking-as-a-service products to companies building financial tools, as well as treasury management products for businesses handling large volumes of transactions.
“After 10 years of building payment infrastructure and going deep, we realised that businesses needed more than just getting paid to grow,” Lobelle told TechCabal on Monday. “We wanted to leverage the expertise that we have built over the last decade to continue to address some of the pain points that businesses have.”
Securing a microfinance banking licence is the latest step in what has been a short but significant expansion into consumer-facing financial services for Paystack. That expansion began last year with the launch of its consumer payments app, Zap, and has now progressed with regulatory approval that allows the company to operate as a deposit-taking institution.
Paystack Microfinance Bank, also known as Paystack MFB, will operate as a sister company to Paystack’s long-established payments business. Both entities will be run independently under the company’s American parent, allowing them to collaborate where necessary while maintaining separate regulatory and governance structures.
“The two entities will collaborate closely within the relevant regulatory framework but fundamentally have their own licences, governance, scope, products and services,” Lobelle said. She explained that this separation limits regulatory exposure and allows Paystack to test lending and deposit products without the cost or scrutiny that comes with a full commercial banking licence.
Since the launch of Zap, Paystack MFB represents the company’s latest move to gain greater control over the money flowing through its network. Paystack currently processes trillions of naira every month for around 300,000 Nigerian businesses. With the addition of a banking arm, the company can now offer tailored banking services to these merchants, increasing the value it earns from each business relationship.
The bank also enables Paystack to lower the barrier for creating banking products in Nigeria through its banking-as-a-service platform. This mirrors how the company simplified online payments for businesses a decade ago by providing easy-to-integrate infrastructure that reduced technical and regulatory hurdles.
“By adding Paystack MFB to our family of brands, we’re finding the right balance through combining the rapid innovation of a tech-first platform with the stability of traditional banking,” Lobelle said.
Industry analysts view Paystack’s banking licence as a structural shift rather than a simple product expansion. While payments made the company one of the checkout layers for Nigeria’s internet economy, that model left Paystack dependent on partner banks to hold customer funds. With Paystack MFB, the company is moving into parts of the financial stack where margins are higher and where small businesses often face the most friction.
In this space, Paystack MFB will compete directly with traditional microfinance banks such as LAPO, Accion, and Baobab, as well as digital-first lenders including Carbon and Fairmoney. It will also face competition from embedded finance platforms like Moniepoint, OPay, PalmPay, and Kuda, all of which already combine payments, deposits, and lending at scale.
By contrast, digital-first banks such as Kuda took a different route by starting with deposits and everyday consumer banking before layering in credit. Paystack’s approach reflects its roots in infrastructure, building upward from payments rather than downward from retail banking.
Despite the new licence, Paystack’s existing partnerships with commercial banks will remain unchanged. The company’s payments arm currently relies on partnerships with institutions such as Titan Trust Bank to support online payment settlement. Lobelle said these relationships will continue. “The payments business is one of partnership and reliability. We have dozens of partners today in Nigeria. That doesn’t change,” she said.
In April 2025, Nigeria’s Central Bank fined Paystack ₦250 million, about $190,000, for allegedly operating Zap as a wallet in violation of its regulatory licence. Lobelle said Paystack has since secured regulatory approval for Zap and that the fine did not play any role in discussions surrounding the approval of Paystack MFB.
The microfinance bank will also operate independently from Brass, a business banking platform acquired by a Paystack-led consortium of investors. According to Lobelle, Brass will continue to run as a fully independent company. “Brass has its own team, investors. Just like any other financial services platform in Nigeria, Brass would be able to benefit from the banking-as-a-service services from Paystack MFB, but the two are independent,” she said.
Nigeria’s small business financing gap remains significant, estimated at $32 billion. For Paystack, payments alone are not enough to close that gap. Lending at scale requires access to deposits, regulatory cover, and control over settlement flows. By bringing a microfinance banking licence in-house, Paystack is moving beyond transaction processing into holding funds and deploying capital.
Paystack MFB plans to roll out several credit products, including working capital loans to help businesses manage immediate operating expenses, merchant cash advances repaid from future sales in partnership with Paystack’s payments arm, overdrafts, and standard term loans.
Although microfinance banks in Nigeria do not face the same loan-to-deposit ratio requirements as commercial banks, they still need to attract deposits before lending. Lobelle said Paystack’s strategy to encourage business deposits is built around trust, reliability, and unlocking new possibilities for users. “By having consistently high uptime, and making Paystack MFB the fastest, most dependable way to move money in and out of their account or to access it,” she said, the company aims to become the primary bank account for businesses.
Through its payments business, Paystack already has visibility into merchants’ revenue flows. This allows the company to underwrite credit using live transaction data rather than static financial statements, shortening approval times and improving risk assessment. While payment data helps assess cash flow, lending at scale still requires deposits, liquidity control, and regulatory cover, all of which the microfinance licence provides.
Lobelle noted that Paystack has invested heavily in transfer infrastructure, achieving success rates close to 99 percent, with most transactions completing within seconds. Operating a microfinance bank alongside this infrastructure reduces reliance on legacy institutions for liquidity management and compliance.
Revenue-linked lending exposes lenders to sudden demand shocks, and microfinance banks operate under regulatory caps that limit how quickly their loan books can grow. Even so, Paystack believes that using transactional data allows it to price risk more precisely than lenders that rely on monthly reports or collateral, shaping how it plans to scale its credit operations in Nigeria.
