Why The ZAP Wallet Cost N250m Fine From CBN

The Central Bank of Nigeria (CBN) has imposed a ₦250 million (approximately $190,000) fine on Paystack for operating Zap, its peer-to-peer payment app—as a digital wallet, in breach of regulatory approvals. According to a report by TechCabal, this marks Paystack’s most significant regulatory sanction since it secured CBN approval in 2016.

A Paystack spokesperson responded:

“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 Regulatory Breach

In Nigeria, digital wallets are classified as deposit-taking financial services. Operating such without a specific licence raises red flags for regulators. While Zap reportedly does not directly hold customer funds, it partners with Titan Trust Bank—an institution licensed to accept deposits. Nevertheless, its operations as a wallet-like product triggered the CBN’s regulatory action.

Legal Troubles: The Trademark Dispute

Zap’s challenges extend beyond regulatory compliance. The app is also at the center of a legal dispute with Zap Africa, a Nigerian crypto startup accusing Paystack of trademark infringement. This ongoing litigation adds another layer of complexity to Paystack’s consumer-focused expansion.

Zap signaled a strategic pivot for the Stripe-owned company—from strictly B2B payment solutions to direct-to-consumer financial services. However, the product launch has been anything but smooth, drawing both legal and regulatory scrutiny.

What This Fine Means for Paystack and the Fintech Sector

The ₦250 million penalty sends a strong message: the CBN is ramping up enforcement as fintechs push into more innovative—and risk-prone—territories. In a climate of increased oversight, especially around Know Your Customer (KYC) compliance and onboarding practices, fintech firms are under intense regulatory pressure.

Earlier this year, other players like Moniepoint and OPay were each fined ₦1 billion for compliance breaches, underscoring the CBN’s firm stance on regulatory adherence.

For Paystack, this development is a cautionary moment and a reminder of the delicate balance between innovation and compliance in Nigeria’s tightly regulated financial ecosystem. As the digital finance space continues to evolve, so too will the regulator’s scrutiny—particularly toward firms venturing into consumer finance without fully aligned approvals.