Paystack Inc., the Stripe-owned Nigerian fintech, has entered Nigeria’s banking sector with the acquisition of Ladder Microfinance Bank, giving the fintech greater control over the funds it processes after a decade focused on payments.
The bank continues Paystack’s push into consumer products and adds a banking layer to its business-focused payment product. According to Amadine Lobelle, Paystack’s chief operating officer, the newly acquired entity, Paystack MFB, will begin lending to businesses before expanding to consumers. It will also offer banking-as-a-service (BaaS) products to companies building financial products and treasury management products.
“After 10 years of building payment infrastructure and going deep, we realised that businesses needed more than just getting paid to grow,” Lobelle told 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 the MFB licence is the latest in what has been a short but consequential expansion into consumer-facing financial services for Paystack, one that began last year with the launch of its consumer payments app Zap, and now takes a step further with the company securing regulatory backing to become a deposit-taking institution.
Paystack Microfinance Bank (Paystack MFB) will operate as a sister company to Paystack’s decade-old payment business and will be run independently under their American parent company.
“The two entities (Paystack MFB and Paystack Payments) will collaborate closely within the relevant regulatory framework but fundamentally have their own licences, governance, scope, products and services,” Lobelle said. That separation limits regulatory exposure while allowing Paystack to test lending and deposit products without taking the cost or scrutiny that comes with a full commercial banking licence.
Since launching Zap, Paystack MFB is the company’s latest step towards exerting greater control over the money flowing through its network. After processing trillions of naira monthly for 300,000 Nigerian businesses, Paystack MFB allows the company to upsell tailor-made banking services to these businesses, increasing the margins it earns on each business.
The bank also allows Paystack to lower the barrier to creating banking products in Nigeria through its banking-as-a-service (BaaS) platform, mirroring how Paystack simplified online payments for businesses a decade ago.
“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.
Paystack’s banking licence also marks a structural shift rather than a product expansion, as payments made Paystack one of the checkout layers for Nigeria’s internet economy, but left the company dependent on partner banks for holding funds. Now, Paystack is stepping into the parts of the financial stack where higher margins sit and where small businesses feel friction most sharply.
Paystack MFB will compete directly with a wide range of players: traditional MFBs like LAPO, Accion, and Baobab; digital-first lenders like Carbon and Fairmoney; and embedded-finance players like Moniepoint, OPay, PalmPay, and Kuda, all of which already combine payments, deposits, and lending at scale.
By contrast, digital-first banks like Kuda took the opposite path, starting with deposits and everyday consumer banking before layering in credit, highlighting how Paystack is approaching banking from the infrastructure layer up, rather than from retail banking down.
While the company’s payment arm currently relies on several partnerships with commercial banks like Titan Trust to help receive payments online, Paystack MFB will not affect those partnerships, according to Lobelle. “The payments business is one of partnership and reliability. We have dozens of partners today in Nigeria. That doesn’t change.”
In April 2025, Nigeria’s Central Bank fined Paystack ₦250 million ($190,000) for allegedly operating Zap as a wallet in violation of its regulatory licence. Lobelle told that Paystack has since secured the regulatory approval for Zap, and the fine played no part in the regulatory conversations for Paystack MFB.
The bank will also run independently of Brass, a business bank that was acquired by a Paystack-led consortium of investors, and is run as a fully independent company to Paystack.
“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,” Lobelle said.
Paystack’s credit strategy
Nigeria’s small business financing gap remains large, estimated at $32 billion, and for Paystack, payments alone do little to close it. To lend at scale, a company needs deposits, regulatory cover, and control over settlement flows. Paystack is moving beyond transaction processing into holding funds and deploying capital by bringing a bank licence in-house.
Paystack MFB will roll out working capital loans to help businesses with immediate operating expenses, merchant cash advances repaid from future sales in partnership with its payment arm, overdrafts, and typical term loans.
While Nigerian microfinance banks do not have the stringent loan-to-deposit ratio that commercial banks require, they still need to have deposits before offering loans, and Paystack’s strategy to incentivise business deposits revolves around trust, reliability, and unlocking new possibilities for its users, according to Lobelle.
“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,” Lobelle said about the company’s strategy to become the primary bank account for businesses.
Through its payment arm, Paystack already sees merchants’ revenue flows, allowing it to underwrite credit using live data rather than static statements, shortening approval times and tightening risk models. Payment data helps assess cash flow, but lending at scale requires deposits, control over liquidity, and regulatory cover. The microfinance licence gives Paystack all three.
Lobbelle noted that Paystack has invested heavily in transfer rails, with success rates close to 99% and most transactions completing in seconds. Housing a microfinance alongside that infrastructure reduces reliance on legacy institutions for liquidity management and compliance.
Revenue-linked lending exposes the lender to sudden demand shocks, and microfinance banks operate under caps that limit how quickly a loan book can grow. Still, using transactional data allows Paystack to price risk with more precision than other lenders, depending on monthly reports or collateral.
