The verdict in three sentences
In Lagos in 2026, the merchant picks a PSP on real collection cost, not brand loyalty. Paystack charges 1.5 % capped at 2,000 NGN per local transaction, Flutterwave sits around 1.4 % and up, while international cards climb to 3.8-4.2 %. On a small basket the fixed cap matters most; on a large basket the percentage rules — and the gap over a month easily exceeds 40,000 NGN.
Merchant fees compared — 2026 order of magnitude
The rates below are 2026 estimates for a professional merchant account in Nigeria. Your negotiated terms depend on volume.
| Channel | Merchant fee | Per-transaction cap | Transaction limit | Settlement |
|---|---|---|---|---|
| Paystack (local card/transfer) | ~1.5 % | 2,000 NGN | Per bank | T+1 |
| Flutterwave (local) | ~1.4 % | Varies | Per operator | T+1 |
| Bank transfer (NIP) | Flat 10-50 NGN | n/a | High | Instant to T+1 |
| International card | ~3.8-4.2 % | None | Per issuer | T+2 to T+7 |
| Payment link (aggregator) | ~1.4-2.0 % | Varies | Per channel | T+1 |
Cost for 1,000 transactions of 50,000 NGN
Simulation on a monthly volume of 50,000,000 NGN (1,000 baskets at 50,000 NGN). 2026 estimate.
| Channel | Effective rate | Estimated monthly fees | Net remaining |
|---|---|---|---|
| Paystack (capped) | 2,000 NGN/txn | 2,000,000 NGN | 48,000,000 NGN |
| Flutterwave | 1.4 % | 700,000 NGN | 49,300,000 NGN |
| Bank transfer | ~50 NGN/txn | 50,000 NGN | 49,950,000 NGN |
| International card | 4.0 % | 2,000,000 NGN | 48,000,000 NGN |
On baskets above 133,000 NGN, Paystack's 2,000 NGN cap actually beats a 1.5 % rate — so cap logic can flip the ranking.
Break-even by average basket
The smaller the basket, the more fixed costs hurt. On a 500 NGN basket, a 10 NGN flat fee is already 2 %. Bank transfer wins on tiny baskets; the cap makes Paystack strong on large ones.
| Average basket | Best channel | Estimated all-in rate |
|---|---|---|
| 500 NGN | Bank transfer | ~2 % |
| 5,000 NGN | Flutterwave | ~1.4 % |
| 50,000 NGN | Flutterwave | ~1.4 % |
| 150,000 NGN | Paystack (capped) | ~1.3 % |
| 500,000 NGN (diaspora card) | Card | ~4.0 % |
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Mini case study
Chidi runs a cosmetics store in Lagos. He collects 4,000,000 NGN a month, average basket 20,000 NGN. By moving 70 % of payments from international card to Flutterwave local, he cuts his blended rate from 3.2 % to 1.6 %. Savings: 64,000 NGN a month, about 768,000 NGN a year — enough to fund a monthly ad campaign without touching product margin.
FAQ
Is Paystack always cheaper than Flutterwave?
Not always. Paystack's 1.5 % cap at 2,000 NGN beats Flutterwave on baskets above ~133,000 NGN, but Flutterwave's flat 1.4 % often wins on mid-size baskets. Run your own basket distribution before deciding.
How fast do I get my money in the bank?
Both settle local transactions around T+1 in 2026; international card payments can take T+2 to T+7. Bank transfer (NIP) is near-instant.
Should I offer several payment methods?
Yes. Offering local transfer, card and payment links lifts conversion by 8-15 % in our 2026 observations, because each customer pays with the tool they already trust. Route each order to the cheapest available channel.
How do I negotiate a better merchant rate?
Above 10,000,000 NGN monthly volume, most PSPs will discuss tiered pricing. Bring three months of statements and put providers in competition.
Let's talk about your project. We wire Paystack, Flutterwave and card into your store with automatic routing to the cheapest channel. WhatsApp +221 77 596 93 33.
Mohamed Bah
Fondateur, Kolonell
Passionate about digital and entrepreneurship in Africa, Mohamed has been helping Sénégalese businesses with their digital transformation since 2020. Founder of Kolonell, he believes every SME deserves a professional and accessible online présence.
