E-Financial
Banks Outsource Payment Gateway Services to Fintech
Some money deposit banks have started the outsourcing of their payment gateway services to payment platform providers, in a bid to ensure efficient service delivery and focus on traditional banking services.
Banks in the country as part of their services provide payment gateway for merchants who sign up with them to be able to receive payment through point of sale terminal, internet among other electronic payment channels.
But Zenith bank and Flutterwave, a financial technology services provider, recently inked an agreement to allow the bank to sign up merchants for the service while Flutterwave provide the payment gateway to ensure that the sign up merchants get payments through the various e-payment channels.
Reacting to this developments, Tunde Ogungbade, managing director, Global Accelerex , said that it is an expected and a welcomed development.
“Banks and other financial institutions need FinTech companies and Fintech companies cannot exist without Banks. It is a symbiotic relationship. The Banks and OFIs have the regulatory experience, operational expertise, business risk management and customer trust that have been built over decades and for some, even over a century.
“FinTechs bring the information technology agility and new business models, among other offering to enable Banks identify, grow and reach new market segment or serve exist ones at a low cost structure by using modern business computing platform to complement existing core banking platforms.
“FinTechs also serve as that research and development side of a bank to experiment with new products, services or solutions tailored to various segments without the need to modify stable and functioning core banking which are costly and risk prone.
“As more banks and FinTech see this relationship as a complementary rather that a competitive one, there will be more outsourcing agreements beyond payment that will be a win-win for both sides. This is assuming there is no desire for customer ownership and control, or holding store value (money) on the part of the FinTech, which are critical to the identity and functions of Banks,” he said.
Corroborating Ogungbade, James Agada, managing director, CWG, said that such arrangement will save banks from making further investment in technology as well as maintenance of the infrastructure.
“I see more of such arrangement coming in the industry. I don’t think any bank would want to stop the trend,” he said.
A payment gateway is a merchant service offering that is provided by a Payment Service Provider either directly to merchant or in partnership with a bank.
It was traditional required for e-commerce to enable a third party know as a Payment Service Provider to serve merchants who need to accept payments online so that such payments can authorize and processed for the merchant and the funds settled.
Since all funds have to end up in a bank at settlement, these payment gateways need to connect to a bank eventually, either directly or indirectly.
Relationships with Card Schemes, such as Visa or MasterCard can only be through a bank or at the introduction of a bank, at least for the initial first card scheme relationship to be established. This is because these schemes only have banks or OFIs as members.
Banks do incur fixed cost for establish card scheme membership so utility is key. There can be several business models and roles played by a FinTech acting as a Payment Gateway which depends on its agreement with its partner bank and its status with the Card Schemes.
Africa has marked a significant step towards financial independence following the launch of PAPSSCARD, the continent’s first Pan-African card scheme.
Professor Benedict Oramah, president and chairman of the Board of Directors, Afreximbank,
Unveiled on June 27 at the 32nd Afreximbank Annual Meetings in Abuja, Nigeria, the new card represents a major leap in Africa’s efforts to achieve financial sovereignty by building resilient and independent payment systems, easing people travel and boosting trade integration.
PAPSSCARD, a joint-venture between the African Export-Import Bank (Afreximbank), the Pan-African Payment and Settlement System (PAPSS) and Mercury Payment Services (MPS), enables fast, secure, and affordable retail payments across African borders. Currently, most African card payments are routed through global systems causing increased fees and loss of data control. By processing transactions entirely within the continent, PAPSSCARD keeps value, data, and economic benefit in Africa.
Speaking at the launch, Professor Benedict Oramah, president and chairman of the Board of Directors, Afreximbank, highlighted the significance of PAPSSCARD in reclaiming Africa’s financial autonomy.
“For too long, Africa’s reliance on external payment systems has impeded trade, increased costs, and compromised control over our financial data. PAPSSCARD changes that. It empowers us to move money swiftly, securely, and affordably across our borders. It is a transformative step towards strengthening intra-African trade and preserving value within the continent.”
Mike Ogbalu III, CEO of PAPSS, described PAPSSCARD as a major advancement in the continent’s financial architecture, noting that it is “more than just a payment tool, it is a powerful symbol of progress and a bold step towards financial independence.” He added that the card reflects Africa’s ability to create practical, home-grown solutions that align with how the continent trades, lives, and grows.
Muzaffer Khokhar, executive chairman, Mercury, said the launch represents a milestone in Africa’s move toward financial sovereignty.
“We are proud to support a system built by Africa, for Africa. This is about sovereignty, innovation, and building trust in African systems to shape the continent’s financial future. The PAPSS Card will become Africa’s most trusted payments brand, strengthening the backbone of the continent’s financial future.”
John Bosco Sebabi, acting CEO of PAPSSCARD, added that the new payment offering will unlock benefits for a wide range of stakeholders, from corporates and banks to merchants and individuals.
He said that the PAPSSCARD card would “reduce costs for public institutions, support innovation across the financial sector, and expand access to secure, modern payment tools for people and businesses across the continent.”
Commemorative cards were unveiled at the 32nd Afreximbank Annual Meetings to mark the launch of the PAPSSCARD.
This initiative was made possible by strategic partnerships with issuing banks – Bank of Kigali and I&M Bank Rwanda; Rswitch, Rwanda’s national switch – Smart Cash; and Unified Payments, ensuring its seamless acceptance throughout Nigeria.
African central banks and payment systems are set to spearhead the continent-wide adoption and rollout of the new PAPSSCARD.
This initiative will significantly advance Afreximbank’s strategy to promote financial inclusion and boost intra-African trade under the African Continental Free Trade Area (AfCFTA), fostering a more integrated and self-sustaining African economy.
Polaris Bank is set to host the 2025 edition of its Annual Media Capacity Seminar on July 17, 2025, from 10:00 AM to 1:00 PM. This year’s seminar is themed: “Empowering Journalists in the Digital Age: Storytelling, Tools & Transformation”, and will feature two distinguished facilitators: Taiwo Obe, Founder and Director of Journalism Clinic, and Abayomi Adisa, a Senior Journalist with the BBC.
Now in its 11th year, Polaris Bank’s Media Capacity Seminar has grown into a flagship media education initiative supporting journalism excellence and professional development across Nigeria. Since its inception in 2015, the program has trained over 5,500 journalists, equipping them with the contemporary knowledge and tools needed to thrive in an evolving media landscape and AI era.
The 2024 edition, held in a hybrid format, recorded over 500 participants and focused on “Integrating AI Tools in Contemporary Media Practices for Innovation and Excellence.” Participants gained insights into data journalism, fact-checking, multimedia storytelling, and the responsible use of artificial intelligence in the newsroom.
Building on last year’s success, the 2025 edition will explore critical aspects of modern journalism, including digital storytelling, transformative newsroom practices, and emerging tools that can help journalists remain relevant in practice and impactful in today’s information age.
Attendance at the seminar is free, but registration is mandatory. Interested participants can still register via bit.ly/PAMC2025.
Polaris Bank remains committed to promoting responsible journalism through robust, consistent and premium media education and investing in initiatives that foster a more informed and progressive society.
United Bank for Africa (UBA) has announced strategic expansion into more African countries even as it plans to open a new office in Saudi Arabia, marking a significant milestone in its mission to connect Africa with key global markets.
Oliver Alawuba, GMD/CEO, UBA group,
This emerged during the Group’s Half Year Business Review held at its global headquarters in Lagos, where Oliver Alawuba, group managing director/CEO, UBA group, met with senior executives overseeing UBA’s 24-country footprint.
The meeting reaffirmed the bank’s pan-African strategy while outlining bold new steps into global markets.
Alawuba highlighted UBA’s continued growth outside Nigeria, with more than 51.7% of Group revenues now generated from its ex-Nigerian operations.
He described the Saudi expansion as a move that positions UBA to support cross-border trade, attract investment flows, and better serve the African diaspora.
“UBA’s vision is clear—we are building a truly global institution anchored in Africa, but serving customers across continents. Our entry into Saudi Arabia signals confidence in new opportunities and commitment to supporting economic connectivity between Africa and the Middle East,” he said.
The Saudi expansion adds to UBA’s international presence, which currently includes the United Kingdom, United States, France, and the United Arab Emirates. Alawuba also disclosed that the bank is upgrading its operating licence in France to further strengthen its European operations.
“In Europe, UBA has operations in the United Kingdom and is upgrading its licence in France, expanding its capacity to serve cross-border trade, investment flows, and the African diaspora, complementing our over 40-year presence in New York,” Alawuba noted.
Since launching its pan-African journey with an entry into Ghana in 2004, UBA has expanded rapidly across 20 African countries, establishing itself as a leading driver of financial inclusion, innovation, and regional integration.
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