By Anastasia John E.
The Central Bank of Nigeria (CBN) has fined fintech company Paystack ₦250 million (approximately $190,000) for regulatory breaches related to its peer-to-peer payment application, Zap.
According to a TechCabal report, the CBN determined that Zap was operating as a digital wallet, a function that requires a microfinance or banking license, which Paystack does not possess. Paystack holds a switching and processing license, permitting transaction facilitation but not the holding of customer funds.
Zap, launched in March, allows users to send and receive money, positioning itself as a consumer-facing digital wallet. The CBN flagged this functionality as constituting deposit-taking, a service restricted to licensed deposit-taking institutions.
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 penalty occurs amidst a trademark infringement lawsuit filed by Zap Africa, a Nigerian crypto startup, against Paystack.
In Nigeria’s regulated financial sector, digital wallets are classified as deposit-taking entities, making the operation of such services without the necessary license a significant regulatory concern. While reports indicate that Zap partners with Titan Trust Bank, which is authorized to accept deposits, the CBN still found Paystack in breach of regulations.
This ₦250 million fine represents Paystack’s most substantial publicly disclosed regulatory sanction since its CBN approval in 2016. The incident underscores the increasing scrutiny faced by fintech companies as they expand their services from business-oriented solutions to consumer-facing financial offerings.
