Paystack has acquired Ladder Microfinance Bank to rebrand it into Paystack Microfinance Bank continuing its foray into banking in addition to its business-focused payment product.
Paystack’s chief operating officer, Amandine Lobelle states the newly acquired entity, Paystack MFB, will begin lending to businesses before expanding to consumers. It will also offer banking-as-a-service (BaaS) products to companies building financial products and treasury management products.
“After 10 years of building payment infrastructure and going deep, we realised that businesses needed more than just getting paid to grow,” Lobelle told TechCabal
“We wanted to leverage the expertise that we have built over the last decade to continue to address some of the pain points that (businesses) have.” She concluded
Paystack Microfinance Bank
Paystack Microfinance Bank (Paystack MFB) will operate as a sister company to Paystack’s decade-old payment business and will be run independently under its American parent company.
“The two entities (Paystack MFB and Paystack Payments) will collaborate closely within the relevant regulatory framework but fundamentally have their own licences, governance, scope, products and services,” Lobelle said.
That separation limits regulatory exposure while allowing Paystack to test lending and deposit products without taking the cost or scrutiny that comes with a full commercial banking licence.
Paystack MFB is the company’s latest step towards exerting greater control over the money flowing through its network. The bank also allows Paystack to lower the barrier to creating banking products in Nigeria through its banking-as-a-service (BaaS) platform, mirroring how Paystack simplified online payments for businesses a decade ago.
“By adding Paystack MFB to our family of brands, we’re finding the right balance through combining the rapid innovation of a tech-first platform with the stability of traditional banking,” Lobelle said.
While the company’s payment arm currently relies on several partnerships with commercial banks like Titan Trust to help receive payments online, Paystack MFB will not affect those partnerships, according to Lobelle. “The payments business is one of partnership and reliability. We have dozens of partners today in Nigeria. That doesn’t change.
