Fintech firm Paystack to spread across Africa
Payments firm Paystack is ramping up efforts to expand to more African countries. So says Joel Bronkowski, Paystack South Africa country lead, in an e-mail interview with ITWeb.
Paystack is a Nigerian financial technology company that offers payment processing services to businesses and was acquired by Irish-American financial services company Stripe for $200 million (R3.7 billion) in 2020.
It entered the South African market in 2019, and is one of Y Combinator’s first investments in Africa.
According to Bronkowski, the firm started off with two employees in SA and has since grown the staff complement to 40.
“The first year was spent getting our partnerships in place and doing market research on the opportunity in SA. This early time served us well in forming a number of early alliances that we returned to when our product was ready for beta testers.
“In the past year, we’ve expanded to Kenya and have plans to grow into North and Francophone Africa.”
However, Bronkowski says “it’s not easy doing business in Africa”.
“As Paystack, we’re working to solve this challenge, but even still, the regulatory frameworks make it hard for African businesses to work with each other. Many South Africans want to collect in USD or other foreign currencies to essentially run their businesses and target foreign customers. This is not an easy task for them in SA.”
He adds that businesses are looking to use international tools that simply aren’t available to South Africans because they do not offer South African payment platforms.
While Paystack has entered partnerships with Wix, Craft CMS, Commerce7 and Siteminder to solve this challenge, Bronkowski points out there are many other tools South African businesses would like to use.
The other limitation is cash collections or payment methods to address the needs of folks that do not have e-commerce-enabled cards, he notes, adding that trust in digital payments is another issue.
“We have come a long way with COVID, but there is still some reluctance to pay via digital means.”
Bronkowski explains that Paystack has a payment collection system that can be leveraged in a number of ways.
“At its simplest form, a developer can spin up a checkout with just three API [application programming interface] calls, or a non-technical business can create a free online store using Paystack Commerce.
“We also have integrations with many of SA’s e-commerce tools, such as Wix, Shopify and WooCommerce. Aside from these, we also enable merchants to handle their billing needs via our subscription tool or Debicheck (for debit orders).
“Lastly, we have a product for disbursing funds – we call this our transfers tool. This enables merchants to load their bulk recipients and make payments to them at a low cost.”
Paystack sees a lot of opportunities to work with developers, the start-up ecosystem and the e-commerce space.
“With that in mind, we’re working to both support the communities that exist and create ones that don’t.”