The Central Bank of Nigeria (CBN) has levied a ₦250 million fine on Paystack for operating Zap—its peer-to-peer payment app—as a digital wallet in violation of regulatory terms, TechCabal reports.
The CBN flagged Zap for functioning as a deposit-taking product, a service reserved for licensed microfinance or banking institutions.
Although Zap, launched in March, enables users to send and receive money like a consumer-facing digital wallet, Paystack only possesses a switching and processing licence.
This licence authorizes transaction facilitation but explicitly prohibits the holding of customer funds—a key issue behind the regulator’s action, according to sources close to the situation.
Zap reportedly does not directly hold customer deposits but operates through a partnership with Titan Trust Bank, which is licensed to accept such funds.
Despite this, the CBN maintains that Zap’s current structure breaches regulatory boundaries, particularly given the sensitivity of Nigeria’s financial ecosystem.
A Paystack spokesperson 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.”
This regulatory action coincides with an ongoing legal conflict between Paystack and Nigerian crypto startup Zap Africa, which accuses Paystack of trademark infringement.
