CBN Fines Paystack Over Zap Wallet

CBN Fines Paystack ₦250 Million Over Zap Wallet Operations

Background on the Fine

The Central Bank of Nigeria (CBN) has issued a ₦250 million (approximately $190,000) fine to Paystack for allegedly operating its peer-to-peer payment service, Zap, beyond the scope of its regulatory approval.

Nature of the Violation

Zap, launched in March, acts as a digital wallet for sending and receiving money. However, the CBN flagged it as a deposit-taking service — a function reserved for licensed microfinance or banking institutions.

Paystack only holds a switching and processing license, which allows it to facilitate transactions but not to store user funds. This discrepancy reportedly led to the fine.

Paystack’s Response

A spokesperson for Paystack stated: “We’re working closely with the CBN as they evaluate Zap. Out of respect for the ongoing process, we won’t be making further public statements for now.”

Ongoing Legal Dispute

In addition to regulatory scrutiny, Paystack is currently facing a trademark infringement lawsuit from Zap Africa, a local crypto startup claiming the company unlawfully used its brand name.

Regulatory Implications

Digital wallets in Nigeria are strictly regulated, and providing such services without the required license is a serious compliance concern. Although Zap reportedly does not hold customer funds directly, it partners with Titan Trust Bank, which is authorized to handle deposits.

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Conclusion

This is the most significant regulatory action publicly known against Paystack since its CBN approval in 2016. It reflects the increasing regulatory attention on fintech companies moving into consumer-facing financial services.