Paystack Restructures to Power Africa’s Tourism Economy

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Prominent Nigerian fintech firm Paystack, which was acquired by Stripe, has restructured its operations under a new holding company, The Stack Group (TSG). 

The new entity now encompasses Paystack itself, its consumer payments app, Zap, Paystack Microfinance Bank (MFB), and a venture studio, marking a strategic push for organised growth beyond traditional payments.

Tech Cabal reports that although Stripe’s $200 million acquisition positioned Paystack as a fully owned subsidiary, TSG adopts a fresh ownership framework: it is co-owned by Paystack’s CEO, Shola Akinlade, Stripe, and key Paystack employees referred to as “Stacks.”

“The elegance of this approach lies in rewarding the builders of the company while preserving international support from a premier payments leader through our enduring alliance with Stripe,” explained Amandine Lobelle, TSG’s chief operating officer, who opted not to disclose specifics on the capitalisation table.

This launch aligns with the group’s achievement of overall profitability and consistent positive monthly cash flow, following a more than 12-fold increase in payment volumes since the Stripe deal. “TSG represents an expanded vision for us and establishes the foundation for our company’s trajectory over the coming decade,” stated Akinlade.

TSG solidifies this diversification by isolating Paystack’s core merchant payments operations from its emerging ventures, enabling these new segments to thrive in Nigeria’s competitive financial landscape without diverting resources from Paystack’s flagship payments business, which continues to drive the majority of the group’s revenue.

This setup allows Paystack to focus solely on merchant payments, while Zap and Paystack MFB pursue independent strategies, avoiding any confusion for merchants, regulators, or collaborators, while capitalising on Paystack’s established reputation.

The holding company framework also streamlines regulatory management, as payments, banking, and consumer finance entail varying risk levels and compliance demands. Organising under a hold-co allows for the compartmentalisation of licences, adherence protocols, and risks by business unit and region. The ₦250 million ($190,000) regulatory penalty imposed on Zap, for example, would not have affected the group’s other activities if it had been imposed after TSG was formed.

Paystack aligns with other Nigerian tech firms, such as Moniepoint and Interswitch, that have adopted holdco structures to accommodate multifaceted ecosystems and facilitate additional ventures. These entities have seen explosive growth post-restructuring, as the model eases acquisitions, new builds, and the closure of trials without harming core brands.

Paystack intends to harness its 10-year expertise serving African enterprises, though success in one area doesn’t guarantee it in another. Expanding consumer-oriented financial products demands robust offline networks, contrasting sharply with online payments where Paystack’s experience is nascent. 

Nigeria’s fintech sector has experienced a remarkable surge, often described as a “fintech frenzy”, positioning the country as Africa’s leading hub for financial technology innovation. In 2024 alone, the industry grew by an impressive 70% year-over-year, despite macroeconomic headwinds like funding slowdowns and regulatory tightening. 

This growth builds on a foundation laid by the Central Bank of Nigeria’s (CBN) Payments System Vision 2020, which fostered an ecosystem now boasting over 200-250 fintech operators. Nigeria garners the majority of African fintech investments, accounting for 47% of deals in 2024, and has secured $331 million in funding, despite a 17% decline from previous peaks due to global venture capital caution. Key players like Moniepoint (raising $110 million) and Paystack (acquiring Brass) exemplify this momentum.

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Restructurings into holding companies (holdcos) have become a prevalent trend, reflecting maturity and ambition for multi-business expansion. Companies such as Moniepoint, Interswitch, and now Paystack adopt this model to separate core operations from new verticals, simplifying regulations, enabling acquisitions, and insulating flagship brands from experimental risks. 

This structure facilitates scalability, as seen in exponential post-restructuring growth for these firms. Broader developments include regulatory shifts like the CBN’s crypto ban lift in 2023 and the SEC’s Accelerated Regulatory Incubation Program, boosting sectors like digital lending and payments. 

Fintech advancements, exemplified by Paystack’s restructuring and expansion, could significantly enhance Africa’s and Nigeria’s tourism sectors by streamlining financial transactions, fostering inclusion, and driving economic multiplier effects. 

In Nigeria, where tourism contributes about 4–5% to GDP (pre-COVID figures), fintech enables seamless digital payments for bookings, reducing cash dependence and barriers for international visitors. Platforms like WAKAnow and Hotels.ng have leveraged tools from Paystack and peers (e.g., Flutterwave) to boost online air travel penetration from 0% to 13% over a decade, facilitating hotel reservations, tour packages, and transport. 

This digitisation supports a projected $230 billion African financial services market by 2025, with Nigeria comprising one-third and indirectly fuelling tourism through increased consumer spending and MSME growth.

Across Africa, fintech promotes financial inclusion, reaching 20% debit/credit card penetration in sub-Saharan Africa versus 80% in developed economies, empowering local businesses like eco-lodges and guides with quick loans and payment insights. 

Innovations in embedded finance could integrate payments into travel apps, offering insurance or installment plans (e.g., Reliance HMO’s health coverage for tourists). However, risks such as regulatory fines or cyber threats could erode trust, potentially deterring tech-averse travellers. 

Positively, fintech’s role in agriculture and mobility (e.g., ride-hailing via OPay) creates synergies: better-funded farmers supply ecotourism, while efficient transport enhances accessibility to sites like Lagos beaches or Yoruba heritage spots. 

Overall, this could stimulate a $1 trillion Nigerian economy by 2030, with tourism benefiting from 10% annual fintech-driven growth, attracting more FDI and creating jobs in hospitality. Yet, equitable adoption is key to avoid exacerbating urban-rural divides, ensuring rural attractions like national parks gain from digital tools.

Dive deeper into fintech innovations reshaping Africa’s economy. Explore similar stories and articles on our website today!

FAQs

1. What is The Stack Group (TSG), and why was it created? 

TSG is Paystack’s new holding company, housing Paystack, Zap, Paystack MFB, and a venture studio. It was formed to structure expansion beyond payments, enhance regulatory compliance, and allow independent growth for new verticals while maintaining core focus.

2. How does Paystack’s restructuring affect its ownership?

Unlike being a full Stripe subsidiary, TSG is jointly owned by CEO Shola Akinlade, Stripe, and Paystack employees (“Stacks”), rewarding builders while retaining global backing.

3. What role does fintech like Paystack play in Nigeria’s economy?  

It drives financial inclusion, processes trillions in payments, and supports diversification into banking and consumer services, contributing to a 70% sector growth in 2024 and potential $50 billion GDP uplift by 2025.

4. How could TSG impact tourism in Nigeria and Africa?  

By enabling seamless digital payments for bookings and travel services, TSG could boost online tourism platforms, increase accessibility for international visitors, and foster economic growth that enhances hospitality and attractions.

5. What are the future plans for TSG Labs?  

TSG Labs is a venture studio focusing on emerging technologies like AI and stablecoins to solve fintech and non-fintech problems critical to Africa’s digital future, without shifting away from financial technology.