Top payment gateways for businesses in Nigeria — 2023

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July 6, 2023
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11 min read

Few activities affect business operations as much as payments do, and in Nigeria, the options available to businesses have grown significantly in the past decade. Where they could only accept cash payments, digital payments mean they can now offer their customers more alternatives, improving profits and cash flow in the process.

On the other hand, eCommerce activity in the country has grown steadily, with many people setting up online shops. Experts predict that the number of online shoppers in Nigeria will reach 122 million by 2025 and contribute $72 billion to the country's gross domestic product (GDP).

However, with limited knowledge of payment infrastructure, businesses may struggle to choose the best payment gateways. This article explores some options in Nigeria and what makes them great for businesses.

What are payment gateways?  

Payment gateways facilitate electronic payments. When a user initiates a payment online, payment gateways request authentication from the user, verify that all information provided is accurate and belongs to the customer, and checks whether the customer has enough money to facilitate the transaction before approving it.

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Simply put, payment gateways make it easy for users to conduct safe transactions online. Some of Nigeria's most popular payment gateways include Flutterwave, Paystack, Remita, SeerBit, Interswitch, and Monnify.  

What to look out for when choosing payment gateways in Nigeria  

Think of how you felt the last time you had to wait while a vendor confirmed your transaction or, even more likely, the last time your payment was delayed.

Sometimes, these inconveniences are caused by a business' payment gateway. This section will explain some factors you should consider when choosing a payment gateway.

Cost  

Every business owner is interested in how to make or save more money. Payment gateways are priced differently, so choose one that makes financial sense for your business. Some costs to consider include transaction fees, setup costs, and monthly maintenance fees.

Transaction success rate  

Customers want to complete their purchases with the least stress possible, so choosing a payment gateway with a high transaction success rate is crucial. Customers may be reluctant to conduct business with you when payments repeatedly fall through on your platform. However, discovering which payment gateway has a high transaction success rate is a bit tricky as you often have to depend on what the service provider says. But don't take their word for it; check the customer reviews for a better understanding of their transaction success rates.

Settlement time  

Settlement time refers to how long it takes to receive your money. Unlike peer-to-peer payments, it could take some time before customer payments get to you. Most payment gateways have a settlement time of 1 to 7 days.  

Payment options   

You want to provide your customers with as many payment options as necessary. This includes payment channels like card payments, bank transfers, PoS payments, or USSD. It can also mean providing them multiple currency payment options if your business has international customers.

Security  

As convenient as digital payment solutions are, they are also fraught with risks. Before choosing a payment gateway, ensure that it is secure. A standard security protocol to watch for is whether it is level 1 PCI-DSS compliant. Most payment gateway providers state this on their websites.

Recurrent billing  

If yours is a subscription business, you don't have to run after customers at the end of each billing cycle to get them to pay. A payment gateway with recurrent billing functions will ensure that your customers are charged at the right time, freeing you up to handle other areas of your business.

8 payment gateways in Nigeria  

Now that you know what to look out for when choosing a payment gateway, here are some payment gateways available to Nigerians in no particular order.

Paystack  

Paystack office 55

Paystack is the brainchild of Shola Akinlade and Ezra Olubi. In 2020, American payments company, Stripe acquired the startup in a deal worth over $200 million. One of the first payment gateways in Nigeria, Paystack is present in more than four African countries. In 2018, it announced that its customers processed more than ₦10 billion in monthly transactions.

Features  

  • Cost: No setup fees. 1.5% + ₦‎100 for local transactions, 3.9% + ₦‎100 for international transactions
  • Transaction success rate: near 100% success rate
  • Settlement time: Next day
  • Payment options: card, bank account, USSD, PoS, Visa QR, mobile money, bank transfer, Apple Pay, Visa QR
  • Security: Level 1 PCI-DSS compliant
  • Recurrent billing: Available

More than 80,000 customers use Paystack to receive payments for their businesses. On its success rate page, the startup makes a bold claim; "If a transaction fails on Paystack, it's highly unlikely it'll work anywhere else."

Signing up on Paystack is free. However, the startup charges 1.5% + ₦‎100 for local transactions and 3.9% + ₦‎100 for international transactions. Transactions under ₦‎2,500 do not attract the ₦‎100 fee, and customers do not pay more than ₦‎2,000 for local transactions. Merchants who process large transactions may also be eligible for discounts, while accredited educational institutions are charged a flat fee.

Settlement occurs the day after payments are made, so your cash flow is hardly affected. eCommerce entrepreneurs would love Paystack as it is integrated with some of the most popular eCommerce platforms, such as Magento, Wix, WooCommerce, Shopify, BigCommerce, and Drupal.

Merchants using Paystack can receive payments in five currencies, including the naira, USD, Ghanaian Cedis, Kenyan Shilling, and the Rand. There are also payment channels like card, bank account, USSD, PoS, Visa QR, mobile money, and bank transfer. Customers also get virtual accounts and process recurrent payments.

SeerBit  

The SeerBit team
The SeerBit team

SeerBit was founded in 2020, and according to Omoniyi Kolade (CEO), its goal is to be the preferred payment option for businesses in Africa. The company currently serves over 15,000 merchants in eight African countries and hopes to add to that number before the year ends.

Features  

  • Cost: No setup fees; 1.5% of local transactions, 3.8% of international transactions
  • Transaction success rate: Not stated
  • Settlement time: Next day
  • Payment options: direct debit, bank transfer, PoS, USSD, bank account, card, mobile money
  • Security: Level 1 PCI-DSS compliant
  • Recurrent billing: Available

Merchants using SeerBit can receive payments in 13 currencies like GBP, CAD, and USD, so if you have international customers, SeerBit has you covered. There are no setup fees, but it charges 1.5% and 3.8% of the transaction fee for local and international transactions, respectively.

SeerBit provides merchants who don't have websites or online stores payment links they can share with their customers. Merchants get a checkout page and can receive payments from various channels, including mobile money, bank transfer, PoS, USSD, bank account, and card. It also has integrations with WooCommerce, Magento, and Wix. Like Paystack, its transaction settlement time is one day. Businesses can also offer payment options and digital banking solutions using SeerBit's white-label solution.

Flutterwave  

Flutterwave team members

In March 2021, Flutterwave became a unicorn after it raised $170 million in a Series C round. The startup, founded by Olugbenga Agboola, provides payment solutions for more than one million businesses across Africa and counts Uber, MTN, and PiggyVest as some of its customers.

Features  

  • Cost: 1.4% for local transactions, 3.8% for international transactions
  • Transaction success rate: N/A
  • Settlement time: 24 hours
  • Payment options: Bank transfer, bank account, mobile money, PoS, Visa QR, card, etc
  • Security: PA DSS & PCI DSS Compliant
  • Recurrent billing: Only on card payments

Flutterwave is present in 11 countries and enables merchants to accept payments in over 20 currencies. It allows payments through bank transfer, bank account, mobile money, PoS, Visa QR, and card. 

Flutterwave's customers are given a payment link that allows merchants to receive payments online without a website. However, they can create an online store to make it easier to do so. eCommerce businesses also get Shopify, Joomla, WooCommerce, PrestaShop, and Ecwid integration.

Transactions are also settled within 24 hours. Local transactions using cards, wallets, or mobile money are charged a 1.4% fee. In comparison, international transactions are charged 3.8% of their transaction value.

Monnify  

Monnify

Monnify is a payment gateway built by Moniepoint, one of the largest fintech startups in Nigeria. Businesses such as Cowrywise, Thrive Agric, and Bankly use Monnify as a payment gateway.

Features  

  • Cost: 1.5%
  • Transaction success rate: Not stated
  • Settlement time: Next day
  • Payment options: USSD, card, Internet transfer
  • Security: PCI DSS compliant
  • Recurrent billing: N/A

Monnify gives its customers flexible settlement options. While it typically sorts out payments in 24 hours, users can be settled daily, twice daily, or instantly. Currently, it only processes payments for customers within Nigeria, where it provides a checkout option and virtual accounts.

Monnify says its attractive pricing is possible because it owns a switching licence. Account transfers incur a 1% transaction fee capped at ₦‎1,000 per transaction. Card transactions attract a 1.5% transaction fee capped at ₦‎2,000 per transaction. And merchants can receive offline payments when they use Moniepoint's PoS terminals.

Remita  

Remita website screenshot

Many public university students in Nigeria are familiar with Remita, as it is used by several universities in the country for payments. Organisations such as Enugu Electricity Distribution Company (EEDC), DStv, and StarTimes process customer payments using Remita.

Features  

  • Cost: 2% fee capped at ₦‎2,500; foreign cards attract an extra 2% charge
  • Transaction success rate: N/A
  • Settlement time: Next day
  • Payment options: USSD transactions, debit/credit cards, PoS terminals, bank transfers
  • Security: N/A
  • Recurrent billing: Available

Merchants using Remita can receive payments from many sources, such as USSD transactions, debit/credit cards, PoS terminals, and bank transfers. Customers also get access to their financial data, providing them with a clear understanding of their business' finances.

Like all the options on the list, setting up an account comes at no cost to the user, but transactions attract a 2% fee capped at ₦‎2,500; foreign cards attract an extra 2% charge. Remita also supports eCommerce sites like WooCommerce, Wix, Magento, and OpenCart. Merchants can receive same-day payments, but card transactions are settled the next day.

Interswitch  

Interswitch Office

Interswitch is a leading player in the Nigerian financial services space. The company has churned out products like the Verve card that rivals Mastercard and Visa. In 2020, it celebrated its 20th anniversary.

Features  

  • Cost: 1.5% for local transactions (capped at ₦‎2,000), 3.8% for international transactions
  • Transaction success rate: N/A
  • Settlement time: Next day
  • Payment options: USSD, card, bank transfer, QR code
  • Security: PCI DSS compliant
  • Recurrent billing: Available

As one of the oldest fintech players in the country, Interswitch is used by businesses such as Dominos and BetKing. You don't pay a fee to set up an account with Interswitch. Local transactions, however, attract a 1.5% fee capped at ₦‎2,000. Where most competitors say this transaction fee excludes VAT, Interswitch's is VAT inclusive.

You can also receive international payments at a 3.8% VAT-exclusive fee. Settlement, which happens the next day, is done in naira regardless of where the payment was made. Its APIs can be integrated into websites and mobile apps. Users without a website can use its payment link feature to accept payments. If your business requires that you accept recurring payments, you can do that using Interswitch.

DPO  

DPO Group

The DPO Group provides a payment gateway that serves more than 100,000 businesses, including Glovo, Expedia, DHL, and Radisson Blu. One of the oldest payment providers in Africa (it was founded in 2006), the company is present in more than 20 countries. Like Paystack, DPO Group was acquired in 2021 by Network International in a deal worth about $291 million.

Features 

  • Cost: N/A
  • Transaction success rate: N/A
  • Settlement time: 24 hours (real-time for some users)
  • Payment options: Mobile money, USSD, QR code
  • Security: PCI DSS compliant
  • Recurrent billing: Available

One of DPO's biggest features is its presence in 23 countries across Africa and the Middle East. This solves the payment challenges for merchants wishing to sell their services to people in these regions.

Besides being able to pay in their local currencies, DPO's dynamic currency conversion shows users a familiar currency when making payments. Your customers can also pay you whether you have a website or not using DPO's payment links. DPO once charged a setup fee, which has since been stopped.

DPO is integrated into popular eCommerce websites like PrestaShop, Shopify, Wix, WooCommerce, and Magento. You can also integrate the DPO API for payments if you have a mobile or web application. Settlement on DPO takes place within 24 hours. However, users in Kenya and Tanzania can get real-time settlement using the DPO card. Hopefully, it will be opened to other users soon.

Squad  

GTCO

Squad is a payment gateway by HabariPay, a Guaranty Trust Holding Company subsidiary. Having launched in 2022, it is one of the latest entrants to the payments market.

Features  

  • Cost: 0.1% for virtual accounts, 1% for USSD and payment links, 3.5% for international payments using a payment link, 0.25% for SquadPOS transactions.
  • Transaction success rate: N/A
  • Settlement time: Next day
  • Payment options: cards, transfers, USSD
  • Security: PCI DSS compliant
  • Recurrent billing: Available

Squad does not charge a setup fee and does not have a unique transaction fee for all payment methods. For example, while it charges 0.1% of the transaction for virtual accounts, it charges 1% for USSD and payment links. International payments using a payment link attract a 3.5% charge per transaction. Payments made using SquadPOS also attract a 0.25% fee per transaction. Merchants receive payments within 24 hours of their completion. However, Squad is only present in Nigeria. It does not support recurrent billing, which could be a problem for businesses that need recurrent payments.

Kora

Kora network team

Techstars-backed Kora provides payment solutions for a growing number of businesses, including GIG Logistics, Sycamore, Healthtracka, MyXalary, and Oystr. From its origins in Lagos, Nigeria, the startup now has footprints in Canada, the United Kingdom, and Europe.

Features

  • Cost: Zero set-up costs. 1.5% on local transactions, capped at ₦2,000
  • Transaction success rate: 96% on bank transfers
  • Settlement time: Next day
  • Payment options: Cards, bank transfers, mobile money, and pay with bank
  • Security: PCI DSS Level 1
  • Recurrent billing: Yes

Businesses can begin collecting payments using Kora without paying any setup or maintenance fees. It makes money by charging 1.5% on transactions conducted, although fees are capped at ₦2,000. Kora uses next-day settlement, while users can get settled in their local currencies.

Using Kora Checkout, businesses can offer customers the option of paying using cards, mobile money, or bank transfers. Businesses without a website can also accept payments using a Kora payment link. Kora also supports recurrent billing for subscription-based businesses, while it promises a transaction success rate of 96% on bank transfers. Card and payment details are secured courtesy of a PCI DSS Level 1 certificate. 

Accidental writer, covering Africa's startup landscape and its heroes. Find me on Twitter @chigo_nwokoma.
Accidental writer, covering Africa's startup landscape and its heroes. Find me on Twitter @chigo_nwokoma.
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Accidental writer, covering Africa's startup landscape and its heroes. Find me on Twitter @chigo_nwokoma.

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