PayPal Tests ‘Africa Strategy’ in Nigeria with $100 million Fund after Shares Fell 75% in Five Years

PayPal Holdings Inc. is cautiously re-entering Africa, targeting Nigeria as the first test case for a continent-wide expansion backed by a $100 million fund to acquire or partner with key fintech startups, amid a 75.6% decline in its share price over the past five years.

As part of its broader Africa strategy, PayPal is re-entering Nigeria nearly two decades after withdrawing without explaining why strict restrictions remained in place.

With growth in Western markets slowing and shares down 75.6% over five years, the company faces mounting pressure to find new sources of revenue.

Previously, Nigerian users could open accounts and make outbound payments but were unable to receive funds or withdraw balances locally.

PayPal attributed these restrictions to fraud risks, including stolen credit cards from North America and Europe allegedly used via Nigerian IP addresses, and gaps in the country’s identification infrastructure.

The company now returns with a $100 million fund to acquire or partner with key fintech startups.

Nigeria’s Independent Fintech Growth

The restrictions, initially presented as temporary, effectively prevented freelancers, digital workers, and small businesses from accessing one of the world’s largest global payment platforms.

In the years that followed, Nigeria’s fintech sector developed independently. Companies such as Paystack, Flutterwave, Monnify, Kora, and Grey emerged as key providers of cross-border payment services, while several large commercial banks expanded into remittances and international payments to fill the gap.

Launch of PayPal World

In December 2025, PayPal announced plans to roll out PayPal World across Africa in 2026, following its initial unveiling in mid-2024 alongside partnerships in India, China, and Brazil.

Otto Williams, the company’s Head of Middle East and Africa, said the initiative is designed to integrate PayPal with local digital wallets, allowing users to maintain domestic accounts for everyday transactions while accessing international payment services.

The platform facilitates cross-border payments and global purchases directly through existing wallets, eliminating the need to open a separate U.S.-based account. Transactions are processed via a PayPal checkout button linked to local wallet providers.

Paga Partnership in Nigeria

The Nigerian launch is being implemented through a partnership with local fintech firm Paga, enabling users to link PayPal accounts to Paga wallets and gain access to PayPal’s network of more than 430 million global users.

The rollout aligns with PayPal’s strategy to acquire or partner with Nigerian fintech startups and gradually consolidate the market over the next three to five years, as it enters an ecosystem already shaped by strong local competitors, many of which have achieved unicorn status and collectively process an estimated $100 billion in annual transactions.

In Nigeria, PayPal has partnered with Paga, a local fintech firm, to allow users to connect their accounts for seamless access to international payments. PayPal/YouTube

Strategic Focus on Nigeria

Although PayPal maintains operations in countries including South Africa, Egypt, Morocco, Tunisia, Kenya, Ghana, Rwanda, Tanzania, and Algeria, the company is prioritising Nigeria, Africa’s largest remittance market, as it seeks to offset slowing growth and intensifying competition in its core Western markets.

The urgency of the expansion is underscored by PayPal’s share price, which has traded near 52-week lows after a prolonged period of weaker returns, including a 37.7% decline over the past year and a 75.6% drop over five years, heightening pressure on the company to identify new sources of growth.

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Skepticism Remains

While the partnership with Paga marks a milestone for digital payments in Nigeria, skepticism remains. The move may pose a competitive threat to well-established local fintech firms, especially those that have reached unicorn status.

Some also warn that PayPal could leverage insights from local players before eventually marginalizing them, while others cite frozen funds and limited transparency as ongoing concerns.