Paystack quietly obtained a switching and processing licence from CBN in April 2022

December 7, 2023
2 min read
  • Nigerian fintech giant, Paystack, has received a switching and processing licence from the country’s banking regulator, the Central Bank of Nigeria (CBN).
  • This is according to the updated Switching & Processing Licence Category list under the Licensed Payments Service Providers page on the apex bank’s website. This happened in 2022, but we have to journal this considering what an important milestone this is.
  • The fintech startup is one of only 16 other fintech companies CBN approved under this category. Others include Flutterwave, Appzone, GT Bank’s Habaripay, Interswitch, Moniepoint (formerly Teamapt), and Remita, to mention a few. 

According to CBN’s list, Paystack, the Stripe-owned fintech company, received approval to operate under the switching and processing category in April 2022. As one of only 16 fintech startups licenced under this category, Paystack has now been working as a payment switch in Nigeria. 

This license enables Paystack to directly route financial transactions between financial institutions. Before now, when merchants on Paystack received payment, the company worked with third-party partners behind the scenes to process and settle these transactions. With this new license, Paystack now processes transactions directly without any third-party involvement.

So, in the same way that Access Bank can route card and account transactions to GT Bank and vice-versa, Paystack can do the same with other participating financial institutions without needing to go through a central intermediary as was formerly the case. 

For African businesses using Paystack, this means faster transactions, improved security, and better payment experience. This also puts some of Paystack's recent product developments in an interesting context.


Co-founded in 2015 by Shola Akinlade and Ezra Olubi, Paystack aims to make problems surrounding online payment in Africa a thing of the past. The fintech company connects multi-channel payment options (debit cards, credit cards, and direct bank transfers) with businesses to enable them to receive payments globally on the web or mobile.

A month ago, on November 9, 2023, the Nigerian fintech giant announced that it had partnered with the Nigeria Inter-Bank Settlement System (NIBSS) to launch a direct debit digital solution to help Nigerian merchants charge customers’ bank accounts directly.

Also, in October 2023, the fintech startup launched Paystack Virtual Terminal, a digital product that enables physical stores to accept and confirm bank transfers. Having a switching license most likely smoothens the execution of these products.

True to its goal of solving payment problems for businesses across Africa, Paystack has since gone from just operating in Nigeria to expanding to Ghana, South Africa, Kenya, Côte d'Ivoire, Egypt, and Rwanda.

This development at Paystack underlines the growing trend of fintechs acquiring switching licenses. When Paystack got its license in April 2022, it joined juggernauts like Interswitch, eTranzact, Unified Payments and TeamApt in the highest tier of CBN-licensed payments processors. Remita Payments Limited and GT Bank's HabariPay were also among the four new switching licensees at this time.

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Other companies like Appzone, and Flutterwave promptly joined the big switch club to much fanfare a few weeks - months later in 2022.

To go deeper into why fintech companies are acquiring switching licenses, check out the story below. 

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