Nigerian fintech company Paystack has launched an artificial intelligence-powered checkout prototype designed to improve online payment conversion rates for African merchants.
The new tool, uses machine learning to optimise the checkout experience in real time, aiming to reduce cart abandonment, a persistent challenge for e-commerce businesses across the continent.
Paystack, which was acquired by US payments giant Stripe in 2020 for over $200 million, did not disclose the specific mechanics of the AI system. However, the company said the prototype analyses user behaviour during checkout and adjusts elements such as form fields, payment method prominence, and interface layout to suit individual customers.
Addressing Cart Abandonment in African E-Commerce
Cart abandonment remains a significant friction point for online commerce in Africa. Industry studies estimate that over 70 percent of African online shoppers abandon their carts before completing a purchase, often due to complex checkout processes, limited payment options, or poor mobile optimisation.
Paystack’s AI tool is intended to address these issues by personalising the checkout flow. The company said early testing showed improved conversion rates, though it did not provide specific figures.
The prototype is currently being piloted with select merchants in Nigeria, Ghana, Kenya, and South Africa. Paystack processes payments for thousands of businesses across Africa, including ride-hailing platforms, online retailers, and subscription services.
AI Adoption in African Fintech
Paystack’s AI checkout tool reflects trends in African fintech, where companies are increasingly adopting AI to enhance user experience and operational efficiency. In recent months, Nigerian digital bank Kuda and Kenyan mobile money platform M-Pesa have both announced AI-driven features aimed at fraud detection and customer support.
However, the deployment of AI in payments also raises questions around data privacy, algorithmic bias, and regulatory oversight. African regulators have yet to establish comprehensive frameworks for AI use in financial services, though conversations are underway in Nigeria, Kenya, and South Africa.
Paystack has not commented on how it plans to address data privacy concerns or whether the AI system will be audited for bias.
The AI checkout tool could offer a competitive edge in a crowded e-commerce market. Improved conversion rates directly impact revenue, particularly for small and medium-sized enterprises that operate on thin margins.
However, the success of the tool will depend on its ability to function reliably across Africa’s diverse internet infrastructure. Many African consumers access the internet via mobile devices on slower networks, which can complicate the deployment of data-intensive AI features.
Paystack said the prototype has been optimised for low-bandwidth environments, though it did not provide technical details.
Next Steps
The company plans to expand the pilot programme in the coming months, with a full rollout expected later this year. Paystack has not announced pricing for the AI tool, but the company typically charges merchants a percentage-based transaction fee.
As African e-commerce continues to grow, with online retail sales projected to reach $75 billion by 2025, tools that reduce friction in the payment process are likely to see strong demand. Whether AI-powered checkout becomes standard across the industry remains to be seen, but Paystack’s early move positions the company at the forefront of the trend.