JOHANNESBURG - Nigeria's payments scene is hotting up. While in South Africa, card payments innovators like Yoco, Sureswipe and Ikhokha are in full PR-mode as they try to position themselves as the next big thing, in Nigeria it’s online payments start-ups like Paga, Paystack and Flutterwave that are keenly chasing headlines, and for good reason.

Nigeria’s legacy payments infrastructure is notoriously unwieldy to say the least - but that’s something these three firms have boldly decided to tackle head-on. Since Paga was founded in April 2009 by Tayo Oviosu and Jay Alabraba, the company has sought ubiquity by sporting a mostly direct-to-consumer focus.

The platform enables users to transact electronically by turning their mobile phones into electronic wallets. Paga customers are able to perform a number of useful everyday chores like send cash, purchase airtime, pay bills and retailers, and more recently, transfer money to any bank in the country, as well as receive money from anywhere around the world.

It’s easy to underestimate the complexity of executing on such an undertaking. Not only did the start-up require the personal financial backing of one of Silicon Valley’s most prominent angel investors, Tim Draper, to get off the ground, but also two subsequent rounds of investment - the latest of which was a Series B led by Adlevo Capital in 2015.

Then, there was the small matter of negotiating key partnerships that both fortified the company’s local-global (“glocal”) offering and offered customers unprecedented interoperability across mobile networks and financial institutions.

A case in point is Paga’s deal with MFS Africa, which has long been in the making. It was announced a couple of months ago, shortly after MFS Africa chief executive Dare Okoudjou hinted at Afrobytes Tech Conference 2017 in Paris that he and his team were working on something ambitious in Nigeria.

The Paga-MFS partnership offers customers seamless transaction potential across networks and across borders - enabling Paga users and Nigerian bank account holders receive cash transfers from mobile money customers using regional and global money transfer operators connected to MFS’ hub.

Just this month, Paga announced that they were now fully integrated into Nigeria’s banking system. In a Medium blog post, Paga’s chief executive, Tayo Oviosu, recounted how when Paga first launched, the only way to load a Paga account with money was via a “manual deposit”- either through a Paga agent or by depositing directly into the company’s bank account in-branch or via EFT.

Back then, twenty staff members were needed to make this manual deposit process work, and it took an average of two hours to process deposits. Today, cash transfers can instantly be made to Paga accounts from any bank in the country, and vice versa. As of October 1, 2017, Oviosu expects Paga’s manual deposits to be a thing of the past.

Paystack was founded in 2015 by Shola Akinlade and Ezra Olubi.

According to media reports, they’ve so far landed $1.42million (R18.87m) in investment since they launched the business. Quite notably, their seed round which closed in December 2016 roped in Comcast Ventures, Singularity Investments and Tencent Holdings.

Last week, Akinlade, Paystack’s chief executive, shared a Medium blog post which featured the start-up’s successful 2015 application to Y Combinator (YC) - with accompanying commentary. YC is a US seed accelerator and venture capital firm, based in Silicon Valley. It is widely considered one of the most powerful start-up incubators in the world. The article revealed some interesting facts regarding the pain points around accepting online payments that Akinlade and Olubi sought to help businesses address.

In 2014, Akinlade claims to have spent the year servicing bank contracts for the implementation of payments and disbursement solutions. That experience led him to the conclusion that most of the infrastructure needed to build a full stack payments application programme interface already existed.

He figured that what was missing was people willing to do the hard work of neatly putting it all together. In the blog post, Akinlade, revealed that when he first started Paystack, there was no way to accept recurring or “one-click” payments. He sensed at the time that financial services incumbents weren’t interested in innovating in that direction.

In his commentary, Akinlade admits the naiveté of that notion, given what he now understands about the complexities of bringing fintech offerings to market and the challenges of promoting innovation within legacy financial institutions.

When YC asked Akinlade to describe his company’s competitive landscape back in 2015, he listed three major types of rivals within the payments space, namely local financial institutions, global payment companies and local non-financial institutions. He noted that local financial institutions tended towards buying white label software solutions and were hamstrung by an inability to make “incremental progress”.

He also reasoned that global payments firms like Stripe and Braintree would find meeting the needs of African merchants challenging, because while they might easily offer them Bitcoin or Apple Pay integration, more complex local offerings like the Pan-African card scheme, Verve Cards and telco-run mobile money services would be much more difficult to assimilate.

While Akinlade didn’t say as much, I imagine that he probably realised that the mobile money services run by mobile networks were some way away from leveraging cross-network interoperability, to say nothing of being well-integrated with the systems of legacy financial institutions.

Conspicuously absent from Akinlade’s competitor breakdown, however, was a detailed profiling of local start-ups also keen on securing a piece of the online payments action. In fairness, he may well have had the mobile telcos and start-ups like Paga in mind when he cited the competitive threat of “non-financial institutions”.

Nevertheless, I am certain that the Paystack‘s founders couldn’t have predicted the rapid progress that yet another Nigerian Y Combinator alum would later enjoy just one year into its existence. Founded by Iyinoluwa Aboyeji - of Andela fame - Paystack’s Silicon Valley-based rival, Flutterwave, successfully closed a $10m Series A in July 2017, courtesy of Green Visor Capital and Greycroft Partners. Flutterwave’s more overtly Pan-African outlook and San Francisco address have no doubt contributed positively to the firm’s investment prospects.

Unlike the founding chief executives of Paga and Paystack, I sense a reluctance on Aboyeji’s part to reduce the start-up success he has so far enjoyed into an executable thesis others might apply to their own hustle.

In a recent exchange I had with him on Twitter, I asked why he was disinclined to speaking on the intricacies of his founder experience. His response: “It is better to stumble with the foot than with the tongue", and “It is too early to distinguish between luck and knowledge.” “Fair enough,” I shot back.

Andile Masuku is a broadcaster and entrepreneur based in Johannesburg. He is the executive producer at Follow him on Twitter @MasukuAndile and The African Tech Round-up @africanroundup.