Nigeria’s Paystack starts in South Africa – and charges 2.9% plus R1.00 per transaction

Pay stack

  • Paystack processes more than half of all online payments made in Nigeria and has now officially launched in South Africa.
  • It did so following an October 2020 acquisition agreement that was reportedly valued at $ 200 million (R2 2.8 billion).
  • The six-year fintech company now backed by Silicon Valley will challenge Yoco and FastPay on South African soil.
  • And Paystack undercuts its competitors’ fees per transaction.
  • More stories can be found at

Nigerian fintech giant Paystack has officially entered the South African market after a six-month pilot program. Paystack processes online and offline payments via cards and electronic transfer (EFT).

In just six years since it first launched in Nigeria, Paystack has expanded into more than 40 countries and expanded its customer base to over 60,000 companies. Its rapid growth, which now accounts for more than half of all online transactions in Nigeria, even caught the attention of Stripe Inc., Silicon Valley’s “hottest start-up”.

Stripe acquired Paystack for more than $ 200 million (R2 8 billion) in October 2020.

This acquisition coincided with Paystack’s preliminary move to South Africa, which included a trial period with select tech startups and e-commerce stores. Paystack is already processing payments from major African companies such as MTN, Bolt and SPAR.

Paystack develops and programs tailor-made payment software that companies and their customers can use to process transactions. The Nigerian tech company currently processes payments in South Africa via cards – including Visa, Mastercard, American Express – EFT and Masterpass. It is planned to introduce PayPal and Snapscan “soon”.

To capitalize on the e-commerce boom in South Africa (with around 40% growth in 2020, mainly due to lengthy bans caused by coronavirus), Paystack has launched a number of plugins for online stores. These payment systems can be integrated with WordPress, Shopify,, Opencart, Magneto, PrestaShop, Squarspace and Joomla.

To attract business in South Africa, Paystack started with a per transaction fee of 2.9% (of total purchase amount) plus R1.00 (including VAT). This offer is valid for companies that signed up for Paystack during the pilot phase and is available to others until June 1st.

This fee increases to 2.7% plus R1 1.00 (excluding VAT) for companies that do not register before June 1st. This is billed to the company using Paystack for every transaction they process.

Paystack’s main competitors in South Africa are likely to be Yoco and PayFast. The latter has a lead of 13 years on Paystack and in 2019 became part of Africa’s largest payment service provider, the DPO Group. Payfast registered 40,000 new merchant accounts in 2020.

PayFast’s transaction fees are generally higher than Paystack’s. Each credit and debit card transaction processed by PayFast costs 3.5% plus R2.00 (excluding VAT).

Yoco, which was launched in South Africa in 2015 and has amassed more than 120,000 registered traders, uses a scale based on the companies’ monthly sales to determine the percentage fee that is charged for each transaction.

The fee per transaction for online payments processed by Yoco is between 3.05% and 3.4% (excluding VAT).

(Compiled by Luke Daniel)

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