Paystack receives its biggest known fine since 2016 over Zap
As Nigeria's central bank cracks down on fintechs around KYC, fraud risks, and licences.
Paystack’s big bet on consumer payments is in trouble. Just weeks after launching its peer-to-peer transfer app called Zap, the Stripe-owned fintech has been fined ₦250 million ($190,000) by Nigeria’s Central Bank (CBN) for allegedly stepping beyond its regulatory boundaries.
The issue? The CBN claims Zap operates like a wallet, a category strictly reserved for companies with banking or microfinance licences.
Paystack, however, holds a switching and processing licence, which means it can move money, but not store it. The company insists it partnered with Titan Trust Bank, a licensed deposit holder, to handle funds. But that hasn’t stopped regulators from drawing the line.
Ogbonda Chivumnovu
This is Paystack’s biggest known fine since gaining CBN approval in 2016, and it highlights a broader challenge. Nigeria’s fintechs are increasingly walking a tightrope between innovation and regulation. As more B2B players like Paystack dive into consumer products, the regulatory spotlight is getting brighter.
It’s not just Paystack. Giants like OPay and Moniepoint have also faced heavy fines (₦1 billion each) recently for compliance lapses. The CBN is cracking down on fintechs around KYC, fraud risks, and licence boundaries, and this latest Zap episode shows they’re not pulling any punches.
While this penalty could derail Paystack’s ambitions for Zap, it’s a cautionary tale for an industry racing to scale. In Nigeria’s tightening regulatory climate, innovation may be welcome, but it won’t be excused from the rules.
