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Payment Gateways in Nigeria

The world has evolved so rapidly that to remain relevant, you must evolve alongside it. One example is the evolution of currency handling. The “cashless policy” concept is here to stay, and because cash is the primary concern of anyone in business, technology must be developed to accept these monetary payments from consumers who want to go cashless.

Similarly, online shopping has become a very handy tool for businesses these days so the need to create a reliable system where customers can make payments for products and services on the internet from the comfort of their homes has become imperative; hence the PAYMENT GATEWAY technology. As you continue on, you will be introduced to a list of payment gateways with the best features.

A payment gateway is a software that allows businesses to receive debit or credit card payments from clients. The word refers to both physical card-reading machines seen in physical retail outlets and payment processing gateways found in internet retailers. In recent years, however, physical payment gateways have begun to accept phone-based purchases via QR codes or Near Field Communication (NFC) technology. It is a technology that reads and sends payment information from a client to a merchant’s bank account. Its role is to collect data, guarantee that money is accessible, and ensure that a merchant is paid.

Payment gateways are client gateways for collecting payment data. They range from point of sale (POS) terminals that collect credit card information through cards or smartphones in physical stores to the “checkout” portals that online shops utilize to submit credit card information or credentials for services like PayPal.

Payment gateways are separate from payment processors, which receive payments on behalf of the business using client information.

There are also additional payment gateways that allow you to pay with cryptocurrencies like Bitcoin.

With the following processes, a competent payment gateway should be able to complete these duties quickly;

Encryption: A payment gateway will encrypt (encode for private use) data between the user’s browser and the retailer’s server for exclusive use between the seller and the buyer.

Request: When a payment processor receives authorization to proceed with a transaction from a credit card company or financial institution, this is referred to as an authorization request.

Fulfilment: After receiving authorization from the payment gateway, the website and user interface may proceed to the following stage.

Types of Payment Gateways

Payment gateways are divided into three categories: 

1. Redirect:

The payment gateway merely redirects the consumer to a payment processor, such as PayPal or Stripe, to complete the transaction.

2. Hosted (off-site payment):

The consumer makes a purchase on your website or at your retail store, and the payment information is sent to the payment provider’s servers to be processed. This is how the Stripe and Square point-of-sale systems work.

3. Self-hosted (on-site payment):

Your servers handle the whole transaction.

How Payment Gateways work

For payment gateways to work, a few players need to be involved. These players are the major stakeholders and they are as follows:

·  The Merchant, which is the firm or the individual making the sale.

· The cardholder; the one who is making the purchase.

·The Issuing bank is the financial organization that manages the customer’s account, which might be a credit card or a checking account linked to a debit card.

·The Card Schemes: These are the credit card firms that administer the card, such as Visa, Mastercard, or American Express.

· The Acquiring Bank: this is the financial institution that holds the merchant’s account.

 When a consumer has loaded their shopping basket with the things they want, they proceed to the checkout, which is where the payment procedure begins. Although the complete payment procedure takes only a few seconds, what happens behind the scenes may appear to be rather complex:


A new payment order is established in the system via a payment gateway during the checkout process. The consumer must next complete and submit the payment form, including credit card details. After that, it encrypts the data, stores it, and transfers it to the merchant’s acquiring organization or bank, all by per cent PCIper cent DSS security standards.

From the acquiring entity to the processing Station

The encrypted data is captured and sent to the payment network, where it is processed by the bank before being sent to the processing centre.

Approval or decline

At this point, the processing centre validates the payment and verifies that everything is in order with the associated credit card issuer. The payment gateway then receives a response indicating whether the transaction was approved or declined.

Transaction approval

The payment gateway receives the final answer from the credit card issuer and redirects it to the merchant’s website, informing the consumer that the transaction has been completed successfully (or rejected, it depends on the case). The payment gateway notifies the merchant of the transaction’s conclusion.

Settlement of payments

Payment is made to the merchant through the payment gateway.

Payment Gateways in Nigeria

Choosing the ideal payment gateway for your eCommerce website is a time-consuming task. When making a decision, make sure that the customer’s payment experience is seamless, quick, and secure. Customers will be more likely to return to acquire additional items or services as a result of this. When choosing a payment gateway for your business, do not go with the first service provider you find. Take your time and go through the features that might be beneficial to your company.

Consider the following factors when selecting a payment gateway:

Payments made across international borders:

If you want to take advantage of the worldwide market, be sure the payment gateway you choose is compatible with the markets you require. Your clients might be from any country on the planet. As a result, you should accept global payments. You may provide international payment gateway services to your clients with Unlimited partnership solutions. PCI compliant platforms, software integrators, PSPs, and software vendors may all benefit from this paradigm.


Some providers may offer a faster response time and a wider selection of currencies, while others may charge lesser prices or have no startup fees. Although your choice is influenced by your financial resources, don’t be swayed just by the price. If you locate a low-cost service, be sure there are no hidden fees.


You may require thorough reports that include transaction activity, chargebacks, refunds, fees, and so on, depending on the size of your firm and your demands. Some providers allow you to try out demo accounts before making a commitment.

Security features:

When shopping for a payment gateway solution, make sure it satisfies security requirements and adheres to current encryption standards, Consider the list of payment gateways below.

List of Payment gateways in Nigeria

  • PayU
  • Interswitch
  • Paystack
  • Flutterwave
  • Paypal
  • CashEnvoy
  • Amplify


PayU is a major online payment service provider devoted to providing businesses and customers with a fast, easy, and secure payment procedure All major credit cards are accepted on this platform and it has a feature that allows for the customer to customise the payment page to their comfort.

There is added safety (PCI DSS SSL and 3D secure) and optional service for fraud protection.


Remita enables you to accept and process payments on your website and mobile apps. They provide plug-ins, SDKs (Software development kit), and APIs (Application Programming Interface) that are ready to use, making integration simple.

 Key Features

Receiving Payments: This allows your consumers to pay you in a variety of methods, including Recurring Payments, Inline Payments, e-commerce Plugins.

Pay your bills: Pay single or many recipients from Remita-registered bank accounts. Funds Transfer Plugin, Single Debit Single Credit, Single Debit Multiple Credit

On a single screen, you may see all of your balances: Remita allows you to see all of your bank account balances on one screen, from any bank.

Make Getting Paid Easier: Simply generate and share payment requests (or e-Invoices) with family, friends, and customers to be paid quickly.

Obtain True Work-Life Harmony: Enjoy the ease of moving between your personal and corporate accounts, and vice versa, anytime you need to.

All Businesses Can Benefit from Easier Payroll: Remita can assist you with your payroll and HR administration needs, whether you have two employees or 200,000.

Fees for setup and support: Free


Local Payments: 2% (minimum N100,000)

4% for international payments

Interswitch Webpay

This is a payment system that connects directly to your website and allows money to be deposited into your account.

Key Features

Integration to WebPAY utilizing an InterSwitch Certified WebPAY Integration Partner (CWIP) at no extra cost, powered by Interswitch, a trusted brand in payments.


The setup fee is N150,000.

1.5 per cent transaction fee, with a ceiling of N2,000.


Paystack has everything you need to collect payments, whether you’re a small or large company. It’s easy, safe, and cost-effective.

Key Features

Paystack is simple and free to use: Paystack may be installed on your website or app in minutes without the need for a developer.

Paystack ensures that you get paid: Payments may be made in just a few simple steps. Your consumers may pay you straight on your website without any fuss.

Paystack provides the following tools to assist you in your growth: Get dependable assistance and business solutions to measure and optimize your growth in addition to payments.


Setup fee: Local Transactions are free: 1.5 per cent + N100 (the N100 cost is waived for transactions under N2500).

3.9 percent + 100 percent for international transactions

Others include; RAVE by flutter wave, VoguePay, GTpay, Amplify e.t.c.


Even though there is no “one-size-fits-all” payment gateway, you still have a lot of alternatives from the list of payment gateways to match your organization. Cost may be the most important factor for certain retailers. Others may have issues with certain payment methods or currencies. Make sure to look into at least a few possibilities before settling on a final supplier.

Jakub Borowiec
Jakub Borowiec
Financial markets enthusiast. I studied management at the University of Economics in Wroclaw.

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