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Paystack: how it works.

4 Mins read

Paystack lets businesses in Africa accept payments by anyone, anywhere in the world via credit card, debit card, money transfer, and mobile money on their websites or mobile apps. It specializes in the fields of financial services, the internet, and payments.


The company was founded in 2015 by and headquartered in Ikeja, Lagos


Ezra Olubi – CTO Chief Technology officer

Shola Akinlade – CEO Chief executive officer.

What they do

Paystack like Flutterwave is a gateway service provider that helps businesses accept payments from clients in Nigeria and oversea. Paystack is not a bank so they don’t save your money, what they do is help you collect payments from your client and transfer them directly to your business bank account. With paystack, you can receive payments from clients in US dollars and Naira.

How does paystack Work?

Paystack has features that allow businesses to collect payments from customers in any part of the world. That is, you can receive payment in different currencies. How to start using paystack

  1. Create an account and complete the required registration: you’ve to open a paystack account to start using their service.
  2. Activate your account: All Paystack businesses start out in Test Mode so you can fully understand the Paystack payment flow before activating your business. In Test Mode, you can integrate with Paystack, use the Dashboard and make test payments. To start accepting real money, you need to activate your business by submitting all Compliance forms on the Dashboard.
  3. Integration: Once you open an account with paystack, and activate your account whether a starter or a registered business you then integrate paystack to your site, and/or share it with your customers or networks who want to pay for your service or make donations.

Paystack features/products

Paystack has so many features available to businesses to accept payment and hence, grow their business. Below are the various features available to businesses on paystack

  1. Payment tool: This is designed to provide the best payment experience for your customers. You can easily receive money from anywhere in the world and even make transfers in single or bulk to other accounts. paystack supports, Card, Bank accounts, Bank transfers, USSD, Apple Pay, Visa QR, and Mobile Money.
  2. E-commerce store and tools: This is an online space where business can list their product to boost online visibility. This includes creating a free online store, professional invoice, and payment links. It was created during the COVID-19 pandemic to enhance business growth. Paystack also has a storefront with a dedicated product link where users can sell digital products like eBooks or media files like songs and podcasts.
  3. APIWith paystack API, Developers can create and launch apps that Collect one-time and recurring payments from your app or website, Make instant transfers, Retrieve all your transaction and customer data, Verify the identity of customers, and do so much more.
  4. Financial data: Paystack provides detailed reporting, alerts, and exports, so you and your team are always on top of business.
  5. Invoices: Paystack allows users to send invoices to customers easily, this helps create a professional feel to the process of accepting the payment
  6. Recurring Billing: Paystack allows you to bill users recurrently as payment for a subscription. This feature reduces the clumsiness in processing the same set of payments over and over again.


Paystack is a technology company solving payment problems for ambitious businesses. Our mission is to help businesses in Africa become profitable, envied, and loved.

Milestone achieved

October 2020

In October 2020, Stripe (an American financial service and software as a service company headquartered in San Francisco) acquired Paystack for a rumored amount of about $200M.

Paystack launched its eCommerce storefront, enabling businesses to sell their product online.

October 2018

10 billion Naira in monthly transaction value

For the first time, Paystack processes over 10 billion Naira (~$27.5 million) in a single month

August 2018

Series A

Paystack raises $8 million Series A led by Stripe, together with Visa, and follow-on investment from Tencent and Y Combinator.

February 2018

Launch of Paystack Starter Businesses

For the first time, businesses who aren’t yet formally registered are able to get started with online payments with Paystack

July 2017

1 billion Naira in monthly transaction value

For the first time, Paystack processes over 1 billion Naira (~$3 million) in a single month

July 2017

Launch of Pay with Bank

Paystack introduces the ability for customers to pay with only a bank account number

December 2016

Seed investment

Paystack raises $1.3 million from local and international investors, including Tencent, Comcast Ventures, and Ventures Platform

November 2015

Y Combinator

Paystack becomes the first Nigerian company to be accepted into the Y Combinator, the tech startup accelerator where companies like Dropbox and Airbnb were incubated

Funding raised

Announced Date Transaction Name Number of Investors Money raised Lead Investors.


Acquisition 1 $200M Stripe
Aug 28, 2018 Series A – Paystack


6 $10.2M Stripe
May 23, 2017 Non Equity Assistance – Paystack


1 $50K Google Launchpad Accelerator
Dec 19, 2016 Seed Round – Paystack


17 Comcast Ventures, Singularity Investments, Tencent
Oct 31, 2016 Non Equity Assistance – Paystack


Mar 22, 2016 Pre Seed Round – Paystack


1 $120K Y Combinator

In October 2020, Stripe (an American financial service and software as a service company headquartered in San Francisco) acquired Paystack for a rumored amount of about $200M.


For Local transactions paystack charges 1.5% + NGN100. The NGN100 is waived for transactions below NGN2500. Local transactions fees are capped at NGN2500

For International payments Paystack charges 3.9% + NGN100. International cards are charged and settled in Naira by default, but you can also choose to get settled in USD.


Paystack currently operates in 3 African countries,  Nigeria, Ghana, and South Africa but you can receive money from over 60 countries with its Apple Pay integration.

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