Nigeria’s Central Bank has fined Paystack ₦250 million ($190,000) for allegedly operating its new consumer app, Zap by Paystack, as a wallet without the proper license, a person familiar with the matter told TechCabal.
Why it matters
This is Paystack’s biggest known regulatory penalty and a sign of the risks fintechs face when entering Nigeria’s tightly regulated consumer finance space.
Catch up fast
- Zap, launched in March, is a peer-to-peer money transfer app.
- The CBN claims Zap operates like a deposit-taking product, a function only allowed for firms with a banking or microfinance licence.
- Paystack currently holds a switching and processing licence, which doesn’t permit holding customer funds.
- The company reportedly partnered with Titan Trust Bank to hold deposits, but that hasn’t shielded it from regulatory action.
Between the lines
In Nigeria, “wallets” are tightly defined. Offering deposit-holding features without the right licence puts fintechs in conflict with the Central Bank, which is increasingly assertive about compliance.
What they’re saying
“Paystack is working closely with the regulator… and out of respect for the process, we won’t be making any public comments at this time,” a spokesperson said.
Zoom out
The fine adds to mounting pressure on Nigeria’s fintech sector:
- Moniepoint and OPay were fined ₦1 billion each earlier in 2024 over KYC and compliance lapses.
- Fintechs are under growing scrutiny as regulators tighten oversight in response to fraud and financial instability.
The big picture
Zap’s launch marked a bold consumer push by the Stripe-owned firm, but it quickly ran into legal and regulatory headwinds—including a trademark dispute with crypto startup Zap Africa, which remains unresolved.
