Paystack, a leading Nigerian fintech firm backed by Stripe, is under fire from the Central Bank of Nigeria (CBN) for operating its new consumer product, Zap, outside the limits of its regulatory licence. The CBN issued a ₦250 million ($190,000) fine, citing that the product functions similarly to a digital wallet — a financial activity Paystack is not licensed to perform.
Zap, launched in March 2025, was introduced as a peer-to-peer payment tool. However, according to a person familiar with the situation, the CBN believes the app’s structure mimics a deposit-taking service, a feature reserved only for microfinance banks or institutions with a full banking licence. “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,” a company spokesperson told media.
While Paystack holds a switching and processing licence, which allows it to route financial transactions, this licence does not permit it to store customer funds. The CBN’s issue lies in the blurred line between transaction processing and deposit-taking — a distinction it is keen to uphold amid mounting scrutiny of the fintech sector.
CBN Draws the Line on Digital Wallets
In Nigeria’s highly regulated financial services landscape, digital wallets are defined as platforms that store customer funds, process payments, enable transfers, and occasionally offer financial management tools. Without the appropriate banking licence, such operations are not permitted. While Paystack reportedly does not store user funds directly, the app operates through a partnership with Titan Trust Bank — a licensed financial institution. This arrangement, however, hasn’t exempted the firm from regulatory penalties.
This is Paystack’s most significant penalty since receiving its CBN licence in 2016. The fine signals the regulator’s strict stance and highlights the delicate challenges fintech faces as they move from B2B transactions to customer-facing products.
Adding to the complications, Paystack’s Zap has already attracted controversy since its debut. Shortly after launch, a Nigerian crypto startup named Zap Africa accused Paystack of trademark infringement, leading to an unresolved legal dispute.
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