The Central Bank of Nigeria (CBN) has imposed a ₦250 million (approximately $190,000) fine on Paystack for operating “Zap,” its peer-to-peer payment app, as a wallet in violation of regulatory approval, according to a report by TechCabal.
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The apex bank flagged Zap as a deposit-taking product—a function exclusively reserved for institutions with microfinance or banking licences.
Launched in March, Zap allows users to send and receive money, positioning itself as a consumer-facing digital wallet.
However, Paystack only holds a switching and processing licence, which permits it to facilitate transactions but not to hold customer funds. This regulatory limitation is at the heart of the CBN’s sanction, sources familiar with the matter said.
“Paystack is working closely with the regulator as they further review Zap, and out of respect for the process, we won’t be making any public comments at this time,” a company spokesperson said.
The penalty comes amid a legal dispute between Paystack and Zap Africa, a Nigerian crypto startup, which has accused the fintech company of trademark infringement.
In Nigeria’s highly regulated financial services sector, digital wallets are classified as deposit-taking entities. Offering such services without the requisite licence raises compliance concerns for regulators.
Although Zap reportedly does not directly hold customer funds, it operates in partnership with Titan Trust Bank, which is authorised to accept deposits.
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