Nigerian fintech company Paga is expanding access to its Direct Debit service, allowing businesses to collect recurring payments directly from customers’ bank accounts, including accounts held outside the Paga network. The development marks another step in the company’s ambition to become a major provider of financial infrastructure for businesses across Nigeria.
The expansion is being delivered through Paga Engine, the company’s business-to-business payments infrastructure platform. It is designed to help companies automate collections without depending entirely on customers using Paga wallets or making repeated manual bank transfers.
Direct Debit allows businesses to collect authorised payments from customers’ bank accounts at agreed intervals. Once a customer approves a payment mandate, a business can initiate subsequent collections without requiring the customer to manually complete every transaction.
This functionality could benefit several industries, particularly subscription services, digital lending, insurance, education and utility providers. For example, a digital lender could use the service to collect scheduled loan repayments, while a school could automate the collection of tuition instalments.
For businesses operating in Nigeria, where customers maintain accounts across different financial institutions, the ability to collect payments beyond a single payment network could reduce collection difficulties and improve operational efficiency.
According to Paga Engine General Manager Ramon Bello, the expansion uses existing interbank payment infrastructure that connects financial institutions, enabling businesses to reach customers across multiple banks. Previously, businesses seeking similar recurring collection capabilities often had to depend on card-based infrastructure, which could limit flexibility.
Bello explained that Paga wants to make its existing payment technology available to other companies rather than requiring every business to develop its own collection systems. The strategy positions Paga Engine as an infrastructure provider operating behind businesses’ payment experiences.
The opportunity is significant given the scale of Nigeria’s electronic payments market. Data from the Central Bank of Nigeria indicates that Direct Debit transactions reached approximately 157.4 million in 2024, with a combined value of about ₦23.3 trillion. This represented a 17 per cent increase compared with the previous year. NigeriaNewsTimes
Paga Engine already supports more than 400 businesses across sectors including manufacturing, financial technology, e-commerce and digital content, according to Bello. The platform also provides businesses with payment processing and wallet infrastructure.
The company is also entering a competitive market. Payment providers such as Paystack, Flutterwave and Zeeh Africa already offer automated bank-account collection services. Paga will therefore need to compete on reliability, integration costs, transaction speed and the ease with which businesses can manage recurring payments. NigeriaNewsTimes +1
However, customer authorisation remains essential. Paga’s mandate documentation requires customers to approve the merchant, payment purpose and agreed collection terms before recurring debits can take place. This is important for building confidence and protecting customers against unauthorised collections. VGS Card
Ultimately, Paga’s Direct Debit expansion represents a broader shift in Nigeria’s fintech industry towards infrastructure-led services. By helping businesses collect payments across different banks, Paga could simplify recurring transactions, improve cash-flow management and reduce administrative costs.
The bigger opportunity is to make digital payments more convenient for businesses and customers, regardless of which financial institution they use.
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