The next fintech race is infrastructure. Paga wants in

African fintech players raced to acquire merchants, onboard users, issue wallets, and become the app consumers reached for whenever they needed to move money.

But as digital payments mature, more fintechs are increasingly discovering that selling the infrastructure underneath financial transactions may be another business with steadier economics.

This is a bet that Paga Group is now making.

Through Paga Engine, its payments infrastructure business, the Nigerian fintech is packaging nearly two decades of internal payments technology into services other companies can plug into instead of building their own systems.

Across the sector, infrastructure is becoming increasingly attractive. Stripe evolved from online checkout into a broader financial infrastructure and embedded finance tool.

Instead of depending on millions of consumer transactions or expensive customer acquisition, infrastructure businesses sit underneath multiple money flows simultaneously. This 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), and hit ₦284.99 trillion ($206.4 billion) in the first quarter of 2025 alone.

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.

Digital platforms want embedded wallets. Enterprises need transfers, collections, reconciliation, and payment orchestration.

With many of these companies needing financial capabilities embedded inside their businesses without spending years building a regulated payment operation, Paga wants its engine to be their solution.

The fintech wants companies to outsource the complexity of building a payment stack from scratch and focus on their core competencies.

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.

According to Stripe, developing even a minimum viable payment gateway can cost between $150,000 and $250,000, excluding maintenance, operational support, and ongoing compliance investments.

For businesses whose core competency is logistics, commerce, retail, or software, not financial services, building that stack internally can be expensive.

“That money can be better invested in the businesses’ core services,” Ramon Bello, general manager of Paga Engine, told TechCabal in an interview.

Paga Engine processed roughly $12 billion in transaction value in 2025 across about 100 million transactions, according to Bello.

At estimated take rates of 0.1% to 0.3%, that could translate into $12 million to $36 million in annual revenue potential from the infrastructure business alone. The Central Bank of Nigeria caps some payment charges at 1.25%.

“When you look at payments, money will move back and forth. That is where the Paga Engine makes money,” Bello said. “Within that flow of money, we charge a very small fee that allows us to keep the service running.”

Paga says onboarding costs and pricing of its engine vary depending on use cases, but fees are deliberately kept low enough to make outsourcing attractive.

Banks and fintechs already offer application programming interface (API) integrations. Flutterwave, Africa’s largest payments startup, is a major payment processor that offers API-driven payment collections and disbursements. It has processed $40 billion since 2016.

Stripe-owned Paystack allows businesses to accept online payments via cards and bank transfers.

Paga argues its edge is not just technology but operational support layered on top of infrastructure.

Paga Engine currently supports more than 200 businesses, including Meta and Amazon, according to the company.

Most of its clients are primarily high-volume businesses, with a strong focus on business-to-business clients.

The platform supports payment gateways, wallet infrastructure, transfers, embedded payment experiences, and agent distribution.

In practical terms, a logistics company could accept delivery payments, issue customer wallets, or pay drivers without building a dedicated payments stack.

Paga says its differentiation comes from operational tooling around compliance, fraud monitoring, transaction visibility, and enterprise support, functions businesses might otherwise have to build internally.

“We put proper support behind our engine for businesses leveraging the infrastructure,” Bello said.

That support matters because building payment gateways often involves more than integrating software.

It requires navigating local payment behaviour, settlement complexity, compliance obligations, especially with fraud cases on the rise, and operational risk.

Paga Engine’s immediate focus remains on Nigeria, but the company sees longer-term expansion opportunities across Africa, particularly around cross-border commerce and helping international businesses connect to African payment systems.

For Paga Group, the infrastructure push is ultimately a bet on where fintech value is moving. Consumer payments are becoming more crowded, and businesses across sectors increasingly want financial capabilities without becoming financial institutions themselves. In that environment, the future of fintech may not belong only to the companies consumers transact with directly, but also to the firms sitting underneath thousands of money flows.