Prior to the implementation of the cashless policy by the Central Bank of Nigeria (CBN) in 2012, businesses primarily relied on cash for payments and receipts. This led to inefficiencies and a lack of inclusivity, as there were limited automated teller machines (ATMs) available and traditional banking operations were often burdensome and time-consuming. Hence, the NIP was created in 2011.
Just to give you an idea, since its inception, the NIBSS Instant Payment (NIP) has witnessed an enormous growth in transaction value. In 2012, NIP transactions worth ₦3.9 trillion ($8.5 billion) were recorded, but as of January 2023, the value of transactions has increased by ten to about N38.7 trillion in January this year. This means that the value of NIP transactions has grown by an average of 41.6% per year since 2012.
The figure shows the numerical growth and potential online payments have brought to the eCommerce space in the country, so much so that Nigeria processed more real-time payments volume than the US in 2021.
This development has not only fueled the growth of online businesses in the country but has also brought opportunities for more payment infrastructure, like payment gateways, to be created to enhance the efficiency of payments through various channels that have emerged over time, which include card payments, bank transfers, PoS payments, or USSD.
What is a payment gateway?
A payment gateway is a service that facilitates the transfer of payments or perhaps, electronic payments between a business and its customers. It can also be referred to as an interface that allows customers to pay for goods and services via multiple methods, channels, or both.
When someone makes a purchase or any transaction, they will be redirected to the payment gateway's website where they will enter their personal and credit card information. After this information is verified, it will then be sent back to the business's website and the transaction will be completed.
These companies process electronic transactions for different categories of businesses - eCommerce websites, corporate entities like schools, hotels and hospitals and smaller businesses like MSMEs/SMEs and online businesses on social media. Brick-and-mortar stores that typically use physical terminals with magnetic strips or chip readers to complete transactions offline now provide the online payment option. They also collaborate with financial institutions such as banks or credit card providers to ensure the secure and efficient transfer of funds between merchants and buyers.
How do I choose a payment gateway for my business?
This is exactly what this article is going to help you do. Although choosing a payment gateway can be tricky, this article will look at the essential criteria to examine before choosing one for your business and rank the top 10 payment gateways currently in the country that you can choose from. The criteria are commission per transaction, payment method or channels accepted, transaction success rate, payment settlement time, ease of onboarding and user-friendly interface.
After a clean sweep of the current payment gateway market in Nigeria, the following emerged as the top ten: Paystack, Flutterwave, RexPay, Interswitch, Voguepay, Monnify, Remita, Squad, DusuPay and OPay
Paystack
Starting our list is Paystack, which has become one of Nigeria's leading payment gateways. Founded by Shola Akinlade and Ezra Olubi and now acquired by Stripe, Paystack offers seamless integration options for businesses, from startups to large enterprises.
With a wide range of payment methods and robust security features, Paystack has earned its reputation as a trusted solution in the Nigerian market. As of today, Paystack is present in more than four African countries. In 2018, it announced that its customers processed more than ₦10 billion in monthly transactions.
Even more interesting about Paystack is the fact that you don't need a website to receive payment as you can receive payments with your starter account. They allow you to receive payments with their payment pages and through the use of invoices. All payments received on your website are remitted the following day.
Cost: No setup fees.
Commission for transactions: 1.5% + ₦100 for local transactions, 3.9% + ₦100 for international transactionsRave
Transaction success rate: near 100% success rate
Settlement time: The 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
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."
Paystack integrates some of the most popular eCommerce platforms, such as Magento, Wix, WooCommerce, Shopify, BigCommerce, and Drupal on its platform thus creating an advantage for entrepreneurs using it.
Rave by Flutterwave
Flutterwave, Africa's biggest fintech, provides payment solutions for more than one million businesses across Africa and counts Uber, MTN, and PiggyVest as some of its customers.
In 2021, the company became a unicorn after it raised $170 million in a Series C round. Since then, it has not looked back in terms of providing efficient financial and payment services for customers globally.
The Rave wallet also has a geolocation feature that allows users to find merchants anywhere in the world that accept Rave payments and has an integrated mapping feature so people don't have to worry about getting lost when they travel either.
Cost: No setup fees
Transaction commission: 1.4% for local transactions, 3.8% for international transactions
Transaction success rate: 100%
Settlement time: 24 hours
Payment options: Bank transfer, bank account, mobile money, PoS, Visa QR, card, etc
Security: PA DSS & PCI DSS Compliant
Currently, Flutterwave is present in 11 countries and enables merchants to accept payments in over 20 currencies. Its 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.
RexPay by Accelerex
Accelerex is a leading fintech company in Africa and is the parent company of RexPay, its online payment gateway product.
RexPay provides a seamless payment service to merchants that can be integrated into their preferred application (Web/Mobile) and enables them to receive online payment from customers. It facilitates real-time debits from cardholder's accounts and onward credits to the merchants' accounts. RexPay supports multiple payment channels (cards, accounts, transfers (Internet Banking), USSD or QR Code) and the processing of payment across major payment schemes and card brands in Nigeria such as Verve, Mastercard and VISA.
This integration ensures a smooth payment experience for both merchants and customers.
RexPay provides an intuitive portal that enables merchants to monitor and manage transactions, refunds, settlements, disputes, and more in real time. Merchants can also generate and download various reports and analytics to track performance and gain valuable insights. RexPay employs advanced technologies and algorithms to detect and prevent fraudulent activities, ensuring compliance with regulatory standards.
Moreover, RexPay allows merchants to create and share payment links with customers via email, SMS and social media, enabling payments without the need for a website or app.
With RexPay, merchants can sign up easily on the platform, and then begin to receive payments from their customers. Signing up for an account on RexPay is free, and customers won't be charged any maintenance fees.
Cost: free setup
Transaction commission: 1.5% capped at N2,000 for local businesses
Transaction success rate: 100%
Settlement time: The next day
Payment options: Bank transfer, bank account, mobile money, Visa, Mastercard, Verve, QR Code, payment links, etc.
Security: PA DSS & PCI DSS Compliant
Interswitch WebPAY
Interswitch WebPAY, a product of Interswitch Group, offers a secure and straightforward way for businesses to accept online payments. With its extensive network and innovative technology, Interswitch WebPAY has established itself as a reliable payment gateway for both e-commerce and brick-and-mortar businesses.
The gateway which has established itself as one of the most reliable and globally recognised payment aggregators, allows you to integrate its payment processing service to your WordPress site via their plugin and offer your customers the ability to pay for goods and services by cards or payment tokens.
However, a major disadvantage is its setup cost. Starting up with Interswitch, you'll be required a one-time fee of N150,000 and a subsequent transaction fee of 1.5%. However, a flat fee of N2,000 is charged for transactions that are above N133,333 then the subsequent 1.5% for the lesser transaction.
Cost: N150,000
Transaction commission: 1.5% for local transactions (capped at ₦2,000), 3.8% for international transactions
Transaction success rate: 100%
Settlement time: The next day
Payment options: USSD, card, bank transfer, QR code
Security: PCI DSS compliant
With Interswitch, users can 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. As one of the oldest fintech players in the country, Interswitch is used by businesses such as Dominos and BetKing.
Monnify by Moniepoint
Monnify is a payment gateway created by Moniepoint, a leading fintech startup in Nigeria. Prominent businesses like Cowrywise, Thrive Agric, and Bankly utilize Monnify as a payment gateway. It is an all-in-one electronic payment service provider that enables merchants to facilitate transactions in a more secure, uncomplicated, and convenient way.
The provider has development-ready platforms such as web and mobile SDK. The API platforms are exclusively documented and offer all that's required of developers to build their custom projects and integrate Monnify into their apps.
Using Monnify, customers have the freedom to choose their preferred settlement options. Although payments are usually processed within 24 hours, users can opt for daily, twice daily, or instant settlements. Presently, Monnify only handles payments for customers located in Nigeria, offering a checkout option and virtual accounts. The provider is renowned for its affordability, with the lowest cost in the industry. Signing up for an account on Monnify is free, and customers won't be charged any maintenance fees.
Cost: free
Transaction commission: 1.5%
Transaction success rate: Not stated
Settlement time: The next day
Payment options: USSD, card, Internet transfer
Remita
Remita, developed by SystemSpecs, is a payment gateway with a focus on government institutions, educational organizations, and corporate clients. It simplifies the process of receiving and making payments, making it a preferred choice for entities that require structured financial management
The Remita payment gateway can also be used by e-commerce sites, insurance companies, educational institutions, utility companies, religious organizations, clubs, associations etc. to collect various types of fees.
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.
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.
Cost: No setup cost
Transaction Commission: 2% fee capped at ₦2,500; foreign cards attract an extra 2% charge
Transaction success rate: N/A
Settlement time: The next day
Payment options: USSD transactions, debit/credit cards, PoS terminals, bank transfers
Security: N/A
It is currently one of the most popular payment gateways in Nigeria as it is mostly used by State agencies.
Squad by GT Bank
Squad is a game-changer in the African digital payments space. An innovative solution designed by HabariPay, a Guaranty Trust Holding Company subsidiary launched in 2022, to empower small businesses and large corporations alike with the flexibility and convenience they need to grow and thrive.
Apart from allowing users the ability to transform their mobile phone into a powerful point-of-sale device, allowing them to take their businesses online, it also offers fast, secure payments through USSD, virtual accounts, and shareable links. It provides a unique infrastructure for developers, enhancing easy integration opportunities that enable them to create amazing payment experiences for their clients.
Squad does not charge a setup fee and has different transaction fees for separate 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 with a payment link attract a 3.5% charge per transaction.
Cost: No setup cost
Transaction commission: 0.1% for virtual accounts, 1% for USSD and payment links, 3.5% for international payments using a payment link, and 0.25% for SquadPOS transactions.
Transaction success rate: N/A
Settlement time: The next day
Payment options: cards, transfers, USSD
Security: PCI DSS compliant
Payments made using SquadPOS also attract a 0.25% fee per transaction. Merchants receive payments within 24 hours. However, Squad is only present in Nigeria. It does not support recurrent billing, which could be a problem for businesses that need recurrent payments.
DusuPay
Dusupay is an African payment provider that provides incredibly secure, efficient, and quick infrastructure for businesses to use. The payment gateway is free to set up, supporting merchants with up to 5,000 customers. They also have the option of being able to accept Visa, Mastercard, and Verve for their users.
DusuPay offers one-time and recurring payments to merchants. One-time payment processing is similar to the traditional gateway. However, recurring payments are processed with this company's own technology.
Their pricing plan, however, differs from the rest of the payment gateways out there. They've been trusted by hundreds of multi-million-dollar companies with B2B customers for a long time.
Cost: No setup fee
Transaction commission: Card - 4.9%, Bank - 3.5%
Transaction success rate: Not stated
Settlement time: Within 1 day
Payment options: Rupay, Visa, MasterCard, Amex, JCB, Maestro, PayD and many more
Security: PCI DSS compliant
Opay
OPay is a mobile payment platform that has expanded its services to include ride-hailing, food delivery, and other on-demand services. It has gained prominence as a super app, providing users with multiple functionalities, including payments, making it a convenient choice for those seeking an all-in-one solution.
OPay payment gateway is the latest payment gateway in Nigeria for developers to accept payments on their websites or apps. The platform offers various features, including fraud prevention, two-factor authentication, automatic chargeback prevention, HIPAA compliance and more.
OPay is not limited to being just an e-commerce gateway but also offers support for different types of businesses like restaurants, digital agencies, and online retailers. Its customers can choose to pay from their cards, use QR payments, or with their OPay Wallet.
Cost: No setup cost
Transaction commission: N/A
Transaction success rate: N100%
Settlement time: Within a day
Payment options: USSD transactions, debit/credit cards, PoS terminals, bank transfers
Security: PCI DSS compliant
The Checkout payment solution is a convenient alternative to traditional card or cash payments.
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