Barely two months after its official foray into the consumer financial space with Zap, Paystack has been hit with a snag by the Central Bank of Nigeria (CBN), which has fined the company ₦250 million (approximately $190,000) for allegedly operating its consumer product as a wallet without the necessary regulatory licence.

According to TechCabal, Paystack holds a switching and processing licence, a permit that allows it to route financial transactions between financial institutions, but not to hold customer funds. However, Zap by Paystack has been operating in this parallel since launching in March. 

This was the basis for the CBN sanction, as the apex bank continues to advance its regulations to ensure compliance in Nigeria’s increasingly complex financial services terrain. Just last December, it was reported that two of the country’s leading fintechs, Opay and Moniepoint, were each fined ₦1 billion over similar compliance issues.

For Paystack, this marks its first regulatory penalty since it began operating as a business-to-business (B2B) company following CBN approval in 2016.

“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,’’ an undisclosed spokesperson from Paystack told Techcabal.

CBN’s fine on Paystack’s Zap also comes amid an unresolved trademark tussle with Zap Africa, a decentralised finance (DeFi) startup that launched in 2023. Zap Africa has formally requested that Paystack discontinue using the name Zap. In response, Paystack issued a similar legal warning.

As of the time of writing, there has been no resolution to the legal dispute.