The Central Bank of Nigeria (CBN) has imposed 250 million (approximately $190,000) fine on Nigerian fintech company Paystack for operating its peer-to-peer payment app, Zap, in breach of regulatory guidelines.
This development was first reported by TechCabal and marks the most significant regulatory action against Paystack since its licensing by the CBN in 2016.
According to the report, the CBN flagged Zap as a deposit-taking product—a function legally restricted to institutions with microfinance or full banking licences. Paystack, however, currently holds only a switching and processing licence, which allows it to facilitate transactions but prohibits it from holding customer funds directly.
Zap, which was launched in March 2025, enables users to send and receive money much like a digital wallet, prompting regulatory concerns. Despite not directly holding customer deposits, Zap reportedly operates in partnership with Titan Trust Bank, which is licensed to accept deposits.
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.”
The sanction comes amid an ongoing legal battle between Paystack and Zap Africa, a Nigerian crypto startup, which has accused the company of trademark infringement over the use of the name “Zap.”
The fine underscores increasing regulatory scrutiny of fintech firms in Nigeria, especially those expanding from backend financial services to consumer-facing platforms. The CBN has maintained strict oversight over digital wallets, viewing them as deposit-taking services that require appropriate licensing to ensure financial stability and consumer protection.
As the regulatory landscape evolves, experts believe fintech companies will face heightened compliance expectations, especially as they continue to blur the lines between tech innovation and traditional banking services.
