Nigeria’s Central Bank has imposed a ₦250 million fine on leading fintech firm Paystack, citing regulatory breaches tied to its newly launched product, Zap. The apex bank alleges that Zap, a peer-to-peer money transfer app unveiled in March, operates like a digital wallet—an activity that requires a banking or microfinance licence.
Paystack, which holds a switching and processing licence, is authorized to route financial transactions but not to store customer funds. According to sources familiar with the matter, the CBN believes Zap crosses this regulatory line, leading to the hefty penalty.
In response, Paystack said it is engaging with the CBN to address the concerns. “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 spokesperson said.
Although Zap does not directly store user funds—it partners with Titan Trust Bank, which is licensed for deposits—the CBN’s action highlights the growing scrutiny of fintech operations in Nigeria’s financial sector. This fine marks Paystack’s largest known regulatory penalty since it began operations in 2016.
The launch of Zap was intended to position the Stripe-owned Paystack in Nigeria’s expanding consumer payments space. However, it has faced multiple setbacks, including a trademark dispute with crypto startup Zap Africa.
This latest sanction follows a trend of stricter oversight by the CBN, which has fined other fintech giants like Moniepoint and OPay ₦1 billion each over compliance lapses in the past year. As fintechs push into new markets, regulators are tightening rules to ensure financial stability and prevent fraud.
The penalty against Paystack signals a warning to other fintechs exploring consumer-facing innovations without fully aligning with Nigeria’s stringent licensing framework.
