It doesn’t quite work to look at it that way. Let’s leave Flutterwave and Paystack out of it for a minute, but payments all over the world work in a variation of below;
Cardholder wants to buy new bag>pays at merchant’s site >payment gateway>payment processor>Acquirer>payment brand’s network>Issuer> cardholder sees damage in account.
In summary, for a payment to go through - it will involve different companies/platforms. There’s nothing new. All of the above have been touched upon by a few people but it’s essentially what @niyi has described.
A startup/firm has to choose which side of the equation they want to play. Also keep in mind, if for instance you’re a payment gateway/brand, you can have more than one acquirer/issuer to ensure your merchants payment are succesful. I’ve just picked the closest receipt I could find which might help to shed more light. In this case for MasterCard transactions, Issuer no 3. processes the payment. That’s issuer 1 to at least 3 is in use.
That’s a smart way of saying that his cofounder is Access Bank. If it is completely true, it makes sense for bank that wants to be at the forefront of fintech disruption..
Several months ago, a random comment from a guy that works with Access Bank (he wears dreadlocks and was formerly a manager at ideaHUB), actually led me into the rabbit hole to unravel the flutterwave/access bank relationship “thingy” when it eventually launched.
As someone that works in the payment space, it’s been interesting putting together pieces of puzzles that have remained unsolved for quite some time.
What seemed to set the house on fire is that Iyin’s use of narrative to sell his products is usually so strong. It once got him to a hot debate with @Tola on andela issues. This time, it is with @xolubi and the paystack gang. Thanksfully, he is committed to making changes in the coming year.
But like every argument, it needs to stop. And most importantly, it is time to leave the “score game” and get back to business for our customers’ sake.
I believe we are all making this thread way more complicated than it needs to be. I do believe this thread was needed as many people who are looking to work with Paystack and Flutterwave were actually confused by a few elements.
What is the difference between Paystack and Flutterwave?
Does Flutterwave power Paystack?
What is the impact if using one versus the other?
I have had many questions for a long time as we are a HR software that uses these tools to power our payroll and many other elements. I also feel that it was indeed a dangerous narrative that needed to be cleared for the greater good of the ecosystem. Its a problem when a startup makes bold claims and no real evidence to back it up. It is actually a bigger issue when this story is floating around in Silicon Valley. While I have been here I too have been asked some of these questions.
As startups we need to do our best to support each other. I actually see less collaboration and people jumping on onto other ideas just to say we can do this too. I am looking forward to the day when startups in Nigeria actually STAY in their lane and perfect their own craft. There is no reason why these types of products can not integrate with each other.
So basically Flutterwave’s second tier position is due to a special relationship with Access Bank. While PayStack is in a third tier and merchant-focused tier due to their inability to obtain the sort of backing Flutterwave has to innovate in a flexible manner with MasterCard solutions and their gateway courtesy of Access Bank support. Interesting. This story is taking on another dimension. Is Access Bank an investor or major stakeholder in Flutterwave? Because it’s becoming clear to me that PayStack is only dependent on Flutterwave because of the special relationship with Access Bank where Access Bank backs Flutterwave’s open-ended use of the MiGs, while PayStack is unable to benefit from such a relationship. Why is Access Bank exclusively backing the Flutterwave play ?
Good points. The one critical thing fuelling this narrative is not even the ambiguity in the relationship between PS and FW (which has been clearly explained by both parties) but the retelling of the story by legitimate ‘watchers’ or ‘passengers’ who may or may not have anything to do with either party. The whole brouhaha started as a result of this sort of unfortunate storytelling.
Ego is not a parameter in this PS vs FW equation. From the story so far (at least on this thread) ego has been absent from both important parties.
Nigeria is very unique in that the watcher-passenger group are often are the forefront of any fight. We love the master-servant narrative. Who started what? Who is better at doing what? Who is feeding who?
This is a lesson for all hardworking folks in the ecosystem to concentrate on what’s important - building stuff, creating value and also to remember to tell and shape their own narrative. It is very important within the Nigerian society, it appears to be cultural (i am generalising here) hence the need to incorporate storytelling into our value proposition. Otherwise we get nothing but tales which can sour a previously good working business relationship.
In a badly lit room with only a candle for light, everyone suffers including the candle.
You need to go back and reread everything that was stated. You are the reason this type of story keeps growing.
Where did you get Paystack is lesser than FW? Why can it not be simply they operate in two separate spaces.
Do you know what Flutterwave actually does? Paystack does not depend on Flutterwave. He said they simply had to partner for a short period of time due to a certain circumstance. Finally who said Paystack doesn’t have the same access?
I think the issue where FW went wrong in my opinion is pushing this idea that they power everything. When in fact most of these payment solutions were out before Flutterwave. I think going forward you need to use the words partner and integration. Therefore its clear that all of the payment companies work together.
No. I have it correctly. For the a certain aspect of transactions PayStack uses Flutterwave because Flutterwave has unhindered access to certain gateways courtesy of Access Bank backing. This is the access they market to merchants and other innovators like PayStack. PayStack doesn’t have this access for specific transactions hence the need to use a path through Flutterwave,
My point is banks don’t do these things for free why should Access Bank guarantee Flutterwave’s unhindered use of certain gateways? Is Access Bank a direct shareholder in Flutterwave or one of its directors is ? Who paid for what? What is the nature of this relationship? So in essence Flutterwave has a special monopoly courtesy of Access Bank ?
If you want people to commit to an industry be transparent. We’re here shouting FinTech meanwhile open access that should empower disruption and initiatives is currently being defined by unclear special relationships and the same old backyard business. Why is Access Bank backing Flutterwave’s exclusive unhindered use of certain gateways so other payment providers are forced to pass through them courtesy of this relationship ! As an Access Bank shareholder I am interested in knowing how the bank is remunerated for this exclusive access or if they have indeed paid for a stake . If it’s a director or special shareholder backing it then something is not right. Either you open the industry up for everyone or not at all.
This is the part that worries me about this forum. It seems most people here are friends or family or colleagues, so you have created an unhealthy echo chamber, an clan mentality where any sort of dissenting view is shouted down without so much as a thought to analyse the message.
The diagram below is from FlutterWave’s website. It illustrates FlutterWave’s position in the payment supply chain. In this diagram, PSP = Payment Service Provider (e.g. PayStack). Notice where the Merchant sits, notice where the PSP sits, notice where FlutterWave sits, Notice where MasterCard and Visa sit, an notice where the Banks sit.
I don’t understand why Access Bank is hiding the nature of its relationship with Flutterwave. What I sincerely hope has not happened here is that no one has taken Access Bank money to buy overvalued shares in Flutterwave from hidden shareholders who have succeeded in paying themselves for doing nothing. Else I do not understand the subterfuge. Someone has mentioned here that some of these Flutterwave guys still work for Access Bank, so is this Silicon Valley-style disruption or “them them” as usual i.e bankers involved with Flutterwave adding an extra layer to charge a percentage of transaction costs for themselves in process asides from the fees Mastercard and Access Bank collect? Any wonder why Paystack’s fees are higher since they are passing through?
There is literally little Flutterwave does that you can’t do if you have unhindered access to the MiGS and other payment platforms, when you’re guaranteed by a top-tier financial institution.
I was honestly surprised when I examined Flutterwave’s API and saw they had the power to authorize debits from cards without validation. This is not something handed to just anyone, especially those operating from a risk-prone country like Nigeria. Its a privilege that comes with Godfather-like backing, so why are they hiding the said Godfather?
All this grammar about disruption meanwhile what is fuelling the “disruption” is a special relationship that allows them to access the hidden subset of Mastercard APIs that the rest of the world has had for years and Nigerian banks have failed to provide to innovative coders for fear of the unknown. So why is it exclusive to them? Anyone who claims they are using Zenith and GTB payment gateways is merely using a restricted version that is not unrestricted but pre-packaged.
Or are you all telling us that if PayStack or some other coders had the same unhindered access they couldn’t code to use these APIs in a secure and simple fashion? The next thing you know now this will turn to issue for law enforcement. Happy disrupting everyone, just know that the illusion of a level playing field is very much an illusion in certain circumstances, be guided so you don’t end up disappointed.
Yes o. I have a problem with wayo, whether its paying lecturers from behind for grades, or giving jobs to the unqualified based on connections. Lets know what’s what so people know what they are “disrupting”. Not playing a different game behind the scenes and then forming the field is open to all.
They use two other banks to do what exactly? If they have same unhindered bank level access like Flutterwave why use the platform ? And don’t tell me that redundancy story.
You have unhindered bank level to multiple payment gateways and then you’re passing through another provider like yourself and paying them fees for access instead of a bank, for what exactly?
I know both founders so I have no dog in this fight. Please do not state relationships unless you yourself know the people personally.
Again just because they have this diagram doesn’t mean they power paystack. From my knowledge they have built their own technology outside of FW. The only reason why FW and Paystack were working together due to a special circumstance. This is the last time I am saying this as at this point I have to assume you are a troll.
