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CBN Fines Paystack ₦250 Million Over Zap Wallet Licensing Breach

Omolade Oyelaja by Omolade Oyelaja
May 2, 2025
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Source: Paystack

In a significant regulatory move, the Central Bank of Nigeria (CBN) has fined Paystack ₦250 million (approxiamtely $155,400) for operating its peer-to-peer payment app, Zap, as adigital wallet without the necessary license. This fine marks the most substantial penalty imposed on Paystack since its inception in 2016.

Zap’s Licensing Controversy

Launched in March 2024, Zap enables users to send and receive money, effectively functioning as a digital wallet. However, Paystack holds a switching and processing license which permits it to facilitate transactions but not to hold customer funds. The CBN contends that by allowing Zap to operate as a deposit -taking platform, Paystack breached its licensing terms.

Although Paystack partnered with Titan Trus Bank, a CBN-regulated institution authorized to accept deposits for Zap’s operations, the Central Bank maintains that Paystack is directly accountable for the licensing violation.

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Broader Regulatory Crackdown On Fintech

This fine is part of a wider crackdown by Nigerian authorities on Fintech companies, emphasizing compliance with Know Your Customer (KYC) protocols, fraud prevention, and licensing requirements. In April 2024, the CBN directed major fintech firms like Opay, Kuda Bank, Moniepoint and Palmpay to suspend new customer onboarding due to inadequate KYC procedures.

CBN has instructed the Nigeria Inter-Bank Settlement System (NIBSS) to debit the settlement accounts of banks and fintechs found to have processed fraudulent transactions, effective from January 2025. This move underscores the central bank’s commitment to safeguarding Nigeria’s financial system and combating fraudulent activities.

Paystack’s Response and Future Implications

Paystack has acknowledged the fine and is reportedly working closely with the CBN to review Zap’s operations. The company has refrained from making public comments during the ongoing review process.

This development serves as a cautionary tale for fintech companies operating in Nigeria. As the CBN intensifies its regulatory oversight, fintechs must ensure strict adherence to licensing terms and regulatory guidelines to avoid similar penalties.

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