Paystack fined USD 115,480 by CBN over Zap product

The move is related to concerns that Zap, introduced in March 2025, functions in a way that falls outside the scope of Paystack’s existing regulatory authorisation. 

Paystack holds a switching and processing licence, which enables it to facilitate transaction routing between financial institutions. However, the Central Bank maintains that Zap operates as a wallet, a classification that typically requires a microfinance or banking licence due to the deposit-taking functions associated with such services. It’s worth noting that Wallets in Nigeria are defined as digital platforms that store user funds and enable transactions like payments and transfers, often with financial management features.

Regulatory context and market implications

Although Zap does not reportedly store user funds directly, it is understood to operate through a partnership with Titan Trust Bank, which is authorised to hold deposits. Despite this arrangement, regulators argue the product’s structure raises concerns about indirect violations of licensing boundaries. 

Representatives from Paystack confirmed they are engaging with the Central Bank to address the matter but declined to comment publicly during the ongoing regulatory review. 

According to Techcabal, this enforcement action is the most significant regulatory penalty made public against Paystack since it received approval from the Central Bank in 2016. It comes at a time of increased oversight of fintechs in Nigeria, particularly around areas such as customer verification and financial compliance. In 2024, Moniepoint and OPay were each fined USD 621.886 over related compliance issues. 

The launch of Zap also triggered a separate legal dispute unrelated to the Central Bank’s action. A Nigerian crypto startup, Zap Africa, has accused Paystack of trademark infringement, a case that remains unresolved. 

As Nigeria’s fintech sector increasingly moves into consumer services, companies face growing scrutiny from regulators intent on maintaining boundaries between permitted activities. The Central Bank’s decision reflects its stance on enforcing licensing rules amid evolving product models within the digital finance landscape.