Paystack, the Nigerian fintech firm owned by Stripe, has unveiled a direct debit product for Nigerian businesses.
This feature will enable businesses to charge customers’ bank accounts directly, making it ideal for recurring payment activities such as subscriptions to services like DStv, Tizeti, Netflix, or Spotify.
Traditionally, direct debits in Nigeria required in-person visits to banks to set up, a process that often led to inconvenience.
With Paystack’s new digital alternative, businesses can seamlessly collect payments with customers’ consent, eliminating disruptions due to missed payments or card-related issues.
Paystack worked with the Nigeria Inter-Bank Settlement Scheme (NIBSS) to connect nearly two dozen banks, simplifying the process of integrating with each bank and significantly reducing the time needed to set up direct debits for customers.
This move is in line with Paystack’s strategy to offer fintech products that facilitate payments directly from consumers’ bank accounts, bypassing the need for debit cards.
This approach minimizes additional costs associated with card transactions, resulting in a more cost-effective and streamlined payment process for both businesses and consumers.
In addition to introducing this direct debit feature, Paystack has recently partnered with Titan Trust Bank and launched virtual point-of-sale terminals, extending its reach to non-card payment alternatives.
The adoption of direct debit services has been growing in Nigeria, with the total value of direct debits increasing significantly from N1.8 trillion in 2020 to N26.4 trillion.
Paystack users can link their bank accounts to merchants’ businesses and grant consent for direct debit transactions. An online portal is also available for users to manage their direct debit mandates with Paystack merchants.
This innovation aligns with Paystack’s goal to provide efficient and user-friendly financial solutions for businesses and consumers.