An objective analysis of seven payment gateways in Nigeria

Benjamin Dada -

Electronic payments have risen in Nigeria since the Central Bank's cashless policy of 2012.

For instance, in 2012, there were 4.4 million NIP transactions worth ₦3.9 trillion ($8.5 billion). Eleven years later, the frequency of NIP transactions has grown by more than 1,150x, while the value of those transactions grew by about 100x. That's insane. Little wonder Nigeria processed more real-time payments volume than the US in 2021.

Expectedly, many new startups have launched to ride this real-time payment wave and bring more payments online. For example, the number of fully CBN-licensed PTSPs has quadrupled in the seven years between 2014 and 2021.

However, today is not for PTSPs. Instead, it's for PSSPs, the people building software for collecting payments online.

A typical example of the software PSSPs build for payment collections is a Payment Gateway. A payment gateway is an interface that allows customers to pay for goods and services via multiple methods, channels, or both.

For this article, we use the terms; payment "method" and "channel" interchangeably. That said, there are five popular electronic payment methods in Nigeria. These payment methods are:

  • cards (majorly debit cards),
  • bank transfer to a NUBAN,
  • direct debit from a bank account,
  • USSD,
  • mobile money or digital wallets
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Honourable mention: QR codes are also sometimes used as a mode of payment. For instance, NIBSS offers NQR. Likewise, Visa has a Visa QR code. Once you scan these codes in your bank app, it will debit the amount, and the payment gateway will reconcile the transaction.

While the basics of a payment gateway are well understood, its implementation and offerings differ across payment providers.

So which payment provider should you integrate with as an e-commerce company or a freelance developer?

Selecting which payment gateways to review

In putting together this list, we did three things.

First, we sought the wisdom of the crowd. We asked our audience to tell us the payment gateways they've used in Nigeria, and more than 60 people replied.

Next, we extracted the recurring names and ran a quick search to find those the government licensed to serve as PSSPs. We would later land on the payment gateways built by these tech companies: Interswitch (developed WebPay), SystemSpecs (built Remita), Paystack, Flutterwave, Seerbit, Fincra, TeamApt (built Monnify) and VoguePay.

However, we will discount VoguePay because they are not as active anymore. The last tweet from their account was two years ago, and the people who mentioned them allude to the fact that they've gone quiet.

For good measure, we looked at the payment gateways by tier 1 banks, GTBank (owns GTPay) and Zenith Bank (owns GlobalPay), but we couldn't find any open developer docs. To get access to their gateway, one would have to contact them. We'll pass on that.

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PayU, an international payment provider with operations in Nigeria, could be an option, but we will not include them in our comparison because no one mentioned them in the replies. But you can check out their Nigeria dev docs.

After all the filtering, we would compare only seven payment gateways operating in Nigeria: WebPay by Interswitch, Remita by SystemSpecs, Paystack, Flutterwave, Seerbit, Fincra, Monnify by Moniepoint (formerly, TeamApt).

The business metrics we will be examining are fees, coverage (markets), methods (channels), commission per transaction, operations (settlement time, disputes resolution), developer-friendliness and bonus features.

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