Paga is constructing an ecosystem sixteen years after its launch

As we head to his workplace on a scorching Friday morning in Lagos, Tayo Oviosu, the CEO of Paga, likens himself to a duck—calm on the floor however paddling furiously beneath. A few days from once we meet, his fintech startup will flip 16. Paga is his life’s work and likewise the primary phrase his son ever mentioned.

What began as an company banking platform in 2009 has advanced into an ecosystem of three companies: Paga Engine, a digital infrastructure platform for corporations to embed funds and monetary companies into their merchandise; Paga, a consumer-focused fintech much like Money App; and Doroki, a retail administration platform designed to serve small and medium-sized companies. 

“We’ve advanced considerably for the reason that pandemic,” Oviosu advised TechCabal. “ Individuals nonetheless consider Paga primarily as an agent community, however we’ve grown right into a world-class, extremely scalable, multi-currency, digital funds and monetary companies engine.” 

In 2024, Paga’s ecosystem processed 124 million transactions value ₦8.7 trillion ($5.6 billion), over 30% of its all-time transaction quantity and 40% of its whole processing worth. This yr, the corporate is averaging over ₦1 trillion ($653 million) in month-to-month transaction quantity.

Most of those transactions are pushed by Paga Engine, the infrastructure that enables companies to leverage Paga’s wallets, prompt funds, and assortment companies. Meta, Cleva, Lemfi, and Omnibiz are among the over 200 companies presently counting on Paga Engine. 

“As a result of we are able to maintain funds, when cash is shipped to a type of wallets from any financial institution, the recipient will get it in below three seconds. No T+1, no T+2 settlement delays,” Oviosu mentioned.

Why construct an ecosystem? 

Oviosu noticed the necessity to construct Paga’s ecosystem after listening to different founders describe challenges Paga had already solved internally.

“Three years in the past, we determined that to make it easy for a billion folks to entry and use cash, we must open up all our infrastructure to different third events and allow them to construct on that infrastructure,” he mentioned. 

Whereas constructing a monetary ecosystem is difficult and capital-intensive, requiring vital funding in licensing, staffing, and expertise, it presents fintechs the most effective path to controlling transactions by decreasing exterior interference and growing their margins. 

When a buyer outlets with a enterprise utilizing Doroki and pays from their Paga account, the cash stays inside Paga’s ecosystem, leading to decrease transaction prices and a smoother, quicker fee expertise for the client.

“The primary massive lesson is that all the pieces takes longer than you count on, particularly when creating one thing solely new,” Oviosu mentioned, reflecting on his classes from constructing Paga’s ecosystem. “Convincing folks to pay from their telephones took years. There’s all the time a behaviour change required, which takes time. Resilience and perception in your mission are very important as a result of the stress of working right here is important.”

That resilience has paid off for Paga’s client enterprise, which targets the “mid to upper-end market” and is rising virtually 200% in energetic customers and income yearly. Slightly than competing for Nigeria’s mass market—largely dominated by OPay, PalmPay, and Moniepoint—Paga is positioning itself alongside neobanks like Sparkle, specializing in extra prosperous customers.

An ecosystem additionally gives a buffer when regulators take surprising actions. In April 2024, Nigerian regulators banned 5 fintechs, together with Paga, from onboarding new clients for six weeks. By establishing Doroki as a standalone enterprise, Paga reduces its reliance on any single income stream, serving to to safeguard the corporate towards future regulatory disruptions.

These days, Paga has revamped its know-your-customer (KYC) course of, relying closely on Nigeria’s nationwide id quantity (NIN) and financial institution verification quantity (BVN) and a face match utilizing liveliness checks from Smile ID, which Ovious mentioned minimize fraud dramatically.  The fintech additionally verifies BVN and blacklists dangerous actors utilizing an industry-wide fraud checklist. 

What does the long run maintain for Paga? 

Constructing on its current progress, Paga plans to increase its client enterprise into one other market in Q2 2025. The holding firm can be elevating capital after attaining web revenue profitability in 2024.  

“We’re elevating capital to drive progress as a result of we’re not but in a spot the place our profitability can drive all the expansion we would like,” mentioned Oviosu, a former vp at Travant Capital Companions, a personal fairness fund. “We’re cautious about progress in any respect prices; we favor disciplined progress.” 

Final yr, Oviosu advised TechCabal that he would like an acquisition over an IPO. It’s an opinion he nonetheless holds right now, however he sees Paga finishing a big non-public fairness deal earlier than a full exit. 

“I nonetheless lean towards a strategic acquisition as a result of it typically aligns higher with long-term technique and reduces short-term public scrutiny. However proper now, our precedence is scaling,” he mentioned.