The next fintech race is infrastructure. Paga wants in

African fintech players, once racing to acquire merchants, onboard users, and issue wallets, are now shifting their focus to the infrastructure underneath financial transactions, a business with steadier economics. As digital payments mature, more fintechs are discovering that selling the infrastructure may be a more lucrative venture. Paga Group, a Nigerian fintech, is making a bet on this trend by packaging its nearly two decades of internal payments technology into services other companies can plug into.

What Paga Has Announced

Through Paga Engine, its payments infrastructure business, the company is providing a platform for other companies to tap into its expertise without building their own systems. This move is part of a broader trend in the fintech sector, where infrastructure is becoming increasingly attractive. Companies like Stripe have evolved from online checkout into a broader financial infrastructure and embedded finance tool.

Inside the Infrastructure Business

The infrastructure business model is especially attractive in markets where digital payment volumes are expanding rapidly. Nigeria's digital payments reached ₦1.07 quadrillion ($774.9 billion) in 2024, according to the Nigeria Inter-Bank Settlement System (NIBSS). The continued rise in the country's digital payment numbers shows that more marketplaces need payout systems, logistics companies need payment acceptance and driver disbursements, and digital platforms want embedded wallets.

• Digital payment volumes in Nigeria: ₦1.07 quadrillion ($774.9 billion) in 2024
• Paga Engine services: payment acceptance, driver disbursements, embedded wallets, transfers, collections, reconciliation, and payment orchestration

Why Infrastructure Matters

Operating payment rails is not cheap. Companies must navigate licensing, compliance, fraud monitoring, settlement operations, security architecture, transaction monitoring, engineering maintenance, and regulatory oversight. Depending on the licence category, payment licences can cost ₦100 million ($72,422) or more at the initial stage in Nigeria. Developing even a minimum viable payment gateway can cost between $100,000 and $500,000, according to Stripe.

The Takeaway

Paga's move into the infrastructure business is a strategic one, capitalizing on the trend of companies outsourcing the complexity of building a payment stack from scratch. By providing a plug-and-play solution, Paga is poised to capture a significant share of the market, where digital payment volumes are expanding rapidly. For companies looking to tap into the vast potential of digital payments, Paga Engine is an attractive option, allowing them to focus on their core competencies while relying on Paga's expertise in payment infrastructure.