The Central Bank of Nigeria has slammed a ₦250 million fine on Paystack, one of the country’s leading fintech firms, over alleged regulatory violations tied to its newly launched consumer app, Zap by Paystack.
The apex bank believes that Zap—a peer-to-peer money transfer service introduced in March—operates as a digital wallet, which is not permitted under Paystack’s current licence, TechCabal reported. he company holds a switching and processing licence, allowing it to facilitate transactions between banks and financial institutions, but not to hold customer funds. Wallet services, deemed to involve deposit-taking, require a microfinance or banking licence.
The CBN’s sanction, the source said, is based on this key regulatory boundary.
In response to inquiries, a Paystack spokesperson stated: “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.”
In Nigeria, wallets typically allow users to store funds, make payments, and conduct transfers. Operating one without the proper authorisation has become a sensitive issue as the CBN steps up enforcement in the rapidly evolving fintech sector. Although Zap does not store funds directly, it operates through a partnership with Titan Trust Bank, which is licensed to hold deposits.
The fine is the largest regulatory penalty publicly known to have been issued to Paystack since it received CBN approval in 2016. It also highlights the growing challenges fintechs face as they venture from business-to-business services into consumer-facing financial products.
Zap’s rollout had already drawn attention, not just for its potential to shake up Nigeria’s consumer payments space, but also due to a legal dispute with Nigerian crypto startup Zap Africa, which accused Paystack of trademark infringement—a matter yet to be resolved in court.
This development comes amid increased regulatory scrutiny of Nigeria’s fintech sector. In 2024, prominent players like Moniepoint and OPay were each fined ₦1 billion over compliance lapses relating to customer onboarding and Know-Your-Customer procedures.
