PayPal Returns to Nigeria With Paga Partnership as Digital Payments Surge

After a 21‑year suspension, PayPal reenters Africa’s most populous economy through Paga, tapping into a booming fintech sector where transaction values hit ₦3.1 quadrillion in 2024 and Paga alone processed ₦17 trillion in 2025.

PayPal Holdings Inc. is betting on Nigeria’s booming digital payments economy and its millions of freelancers to bolster growth, after reentering the country through a partnership with local firm Paga that restores inbound transfers after a 21‑year suspension.

The deal is part of PayPal World, a global initiative launched in 2025 to build a highly interoperable global payment network linking PayPal and Venmo with major wallets such as India’s UPI and Mercado Pago.

Through a single integration, PayPal World allows consumers to make international payments using local wallets, reducing the cost and friction that have long complicated cross‑border transactions.

For merchants, the platform offers access to nearly two billion consumers worldwide, while simplifying compliance and lowering operational costs for small and mid‑sized enterprises.

“PayPal World is a first‑of‑its‑kind payments ecosystem that will bring together many of the world’s largest payment systems and digital wallets on a single platform,” said Alex Chriss, PayPal’s President and CEO, at the launch of the global payment platform.

“The challenge of moving money across borders is incredibly complex, and yet this platform will make it so simple for nearly two billion consumers and businesses.”

PayPal Returns via Paga Amid e-Payment Boom

The partnership with Paga allows Nigerian users to link PayPal accounts in the Paga app, receive funds from more than 200 countries, withdraw instantly, and spend at 30 million merchants worldwide.

Founded in 2009, Paga has long blended digital services with a nationwide physical agent network, making it one of Nigeria’s critical players in extending financial access.

The company says it processed more than ₦17 trillion ($12.23 billion) in transactions in 2025, up from  ₦1.2 trillion in 2021. 

That growth mirrors the broader surge in Nigeria’s digital payments.

According to Agusto & Co., a pan African credit rating and research firm, Nigeria’s transaction volumes in e-payments reached 44.8 billion in 2024, up 16% year‑on‑year, while transaction values climbed to ₦3.1 quadrillion ($2.03 trillion), powered by platforms like Moniepoint, OPay, and PalmPay. 

Together, the figures highlight how deeply embedded fintechs have become in everyday commerce and the potential PayPal’s partnership with Paga offer with Nigeria’s growing digital economy.

PayPal’s Nigerian Return After Two Decades

PayPal suspended inbound transfers in Nigeria in 2004, citing high fraud risks. At the time, the company reported a surge in stolen credit cards from North America and Europe being used through Nigerian IP addresses, alongside weaknesses in the country’s identity verification systems. 

That decision blocked Nigerian users from receiving funds, forcing them to rely on workarounds like cryptocurrency, arbitrage, or foreign accounts to bypass PayPal restrictions.

“Some of the US and UK clients preferred paying on PayPal, but Nigerian IPs were blocked,” Emmanuel Egbule, founder and CEO of Lagos‑based mobile and web applications development firm Standard Development Technologies, told Maarifaah in a phone interview. 

“We had to create localized accounts abroad or rely on alternatives like Payoneer and Grey. All of them popped up because of this issue.”

Nigeria has since made considerable progress on financial integrity. 

In its recently released Central Bank of Nigeria (CBN) Fintech Report, the country’s financial regulator noted stronger anti‑money laundering supervision, tighter know‑your‑customer requirements, and coordinated enforcement actions have helped close long‑standing compliance gaps. 

In October 2025, Nigeria exited the Financial Action Task Force “grey list, a milestone regulators say restored international confidence and reduced frictions for cross‑border finance.

Freelancers Gain Expanded Access

Nigeria serves as the largest hub for online freelancing in Sub‑Saharan Africa, hosting millions of gig workers within a regional pool of about 21.7 million, according to World Bank data.

Alongside Kenya and South Africa, the three countries account for more than 80% of traffic to global freelance platforms.

With PayPal’s return via Paga, Egbule acknowledged the potential boost in the opportunities for freelancers based in Nigeria. 

“Not everyone will have friends in the UK, in the US or in Australia to help them create a PayPal account,” he said. 

“Easy access will stop freelancers from losing money and make them more competitive globally. So it will help them.”

While established businesses such as Egbule’s have since relied on Nigeria headquartered payment processing firms like Paystack for reliability, freelancers starting out often find mainstream gateways too costly. 

Paystack and Flutterwave, for instance, facilitate inbound flows but are largely structured around B2B merchants, with compliance requirements such as SCUML registration. 

Their commission fees are also higher compared to peer to peer alternatives, making them less attractive for small operators. 

This gap opens doors for partnerships like PayPal and Paga, which promise easier access for individuals and freelancers who previously struggled to receive payments.

Formalizing Flows in a New Tax Regime

The partnership also aligns with newly introduced tax reforms aimed at widening the tax net.

Nigeria’s new rules require freelancers to self‑report foreign income above ₦800,000 (about $500 annually), taxed at progressive rates up to 25%.

By offering a mainstream, regulated channel for receiving international payments, PayPal’s integration with Paga supports the government’s push to formalize flows that have long operated outside the system.

Global Pressures and Regional Opportunities

PayPal’s re-entry via its partnership with Paga comes amid news of its shares falling by about 75% over five years, including a 37.7% decline in the past year, pressured by rivals in the U.S., Canada, and Europe.

Analysts see its expansion into Africa as part of a diversification strategy to bolster its global business.

In September 2025, PayPal announced a $100 million commitment to the Middle East and Africa, to be deployed through minority investments, acquisitions, PayPal Ventures funding, and technology deployments. 

“The Middle East and Africa are home to some of the most dynamic and rapidly evolving businesses in the world,” Chriss said. 

“By dedicating a $100 million investment to this region, we’re investing in the technologies, partnerships, and solutions that will help entrepreneurs scale faster, expand their reach beyond borders, and unlock new opportunities for growth in the digital economy.”