I saw Paystack and suddenly felt the need to rush to its defence. Okay, I kid but I think we are being pitted in a competition with other guys we would rather not be in.
At Paystack, we are committed to providing merchants with the best tools to accepting payments online from their customers. This means whether the customers have debit cards, bare bank accounts, mobile money, or even bitcoin. As long as you want to get paid and your customer has the means, the transaction has no reason to not happen. Like my cofounder likes to put it, we are a Merchant Aggregator. Providing “best tools” in this case also means providing opportunities for recurring payments, ease of charging returning customers, and a generally straightforward payment flow on both sides of the table. A business like Uber could not have started by relying on a Nigerian payment gateway in the past. Utility providers like Multichoice, etc still have to chase customers every month end, thus severely increasing the cost of customer retention compared to developed economies.
That said, we are piloting with cards and would be adding other payment channels over time. Interswitch is not our competition. We need them to process Verve cards. Paga is not our competition. We need them to accept payments from their own customers too.
Xolubi don’t get me wrong. You don’t need to defend paystack. You are obviously a talented programmer and paystack demonstrates that and there is space for you guys.
My point is that we are limiting ourselves with payments. The card based method is 20th century. There are too many physical steps for basic electronic transactions that require entering a bank. Nigeria has roughly 8000 branches and 160 million people. Going to banks is a chore unless you are transacting large amounts. 2,000 or 5,000 who wants to go to an atm to collect cash and this is why the banks cannot boast of more than 30 million accounts and I have three. The banks provide little utility for more than 70% of Nigerians. Thats why Mpesa is revolutionary.If you want to transact 50 naira its as cost effective as 50,000 naira.
A big part of the problem is that Nigerian bankers are not innovative. They are generally lazy, crookish and mimic high street banks like Barclays of London and JP Morgan of New York. Nigerian bankers should go learn from Equity Bank how to run a retail operation in a poor country not behaving as if they are on fifth Avenue in Manhattan. While they are in kenya maybe witnessing the power of mobile payments first hand will wake them up from their slumber.
@Nwabu Think of mobile money like transferring airtime from one phone to another phone.
Imagine going to shoprite and you pay by removing your phone and transferring airtime to their phone. Is it faster and smoother than swiping a cedit/debit card?
Then every website you have to pay, you transfer again from your phone.
Note: this is analog to digital transmission.
I don’t see this future. It’s not faster and safer for the consumer.
There is often an inverse relationship between success and notoriety in the African startup scene. And non-consumer focused firms tend to not need to PR, those that need to know them…know them. Inter-switch is still primarily a B to B company that gained notoriety because it become a utility of sorts.
Understood. We are doing well. What are you up to these days?
Focused on a more consultative approach now. Working on fundraising opportunities for African companies. Have some agreements in place with local PE shops looking for co-investors on their deals.
Let me know if you know any investors interested in deals between $500k and $10 million. We have a reliable flow of vetted deals.
I think Interswitch listing on the LSE is bad news for everyone in the Nigerian financial space. i just see it as putting the entire ATM and about 40% of our payment infrastructure in the hands of foreigners who are driven by profit and not development of the Nigerian e-payment Ecosystem.
We need to start looking at ways to create a system that works for us. While I praise @xolubi and his team for the great work they are doing with Paystack, i believe mobile is the answer but “how to get it to work” is the challenge. Cards are limiting, only 25 million Nigerians have bank accounts, more than half do not use cards. we have over flogged the issue of mobile but now is the time to get it to look for innovative ways to get it to work and force the regulators to conform.
@xolubi i hope electronic mandate is in the pipeline for paystack
but I think we are being pitted in a competition with other guys we would rather not be in.
Hope you and Justin are well!