PayPal Holdings Inc. is cautiously re-entering Africa, making Nigeria the first test case for its $100 million fund aimed at acquiring or partnering with local fintech startups. The move follows a 75.6% decline in the company’s share price over five years, highlighting growing pressure to find new revenue streams.
The initiative, dubbed PayPal World, seeks to integrate with local digital wallets, allowing users to maintain domestic accounts while accessing international payment services. Previously, Nigerian users could only send money abroad, as PayPal limited operations over fraud concerns and gaps in identification infrastructure.
Partnership with Paga to Expand Global Access
In Nigeria, PayPal has teamed up with Paga, enabling users to link accounts and connect to more than 430 million global users. Otto Williams, Head of Middle East and Africa, said the platform would eliminate the need for separate U.S.-based accounts, streamlining cross-border payments and international purchases.
A Growing Market and Rising Stakes
Nigeria’s fintech ecosystem has flourished independently during PayPal’s absence, with unicorns like Paystack and Flutterwave processing billions in annual transactions. Analysts warn that while PayPal’s arrival offers opportunities, it may challenge established local players, raising concerns about market consolidation and competitiveness.
Strategic Focus Amid Slowing Global Growth
PayPal operates in several African countries, including South Africa, Egypt, and Kenya, but is prioritizing Nigeria—the continent’s largest remittance market. With shares trading near 52-week lows, the company is betting on Africa to offset stagnating growth in Western markets.
Skepticism Remains
Despite the potential for greater financial inclusion, critics question PayPal’s motives, noting previous restrictions and ongoing transparency concerns. Whether PayPal will empower Nigeria’s fintech landscape or marginalize local innovators remains a critical question for investors, entrepreneurs, and regulators alike.
