Nigeria Central Bank Fines Paystack ₦250M Over Compliance Breach
TLDR
- Nigeria’s Central Bank (CBN) has fined leading fintech firm Paystack ₦250 million ($190,000) for allegedly operating its new consumer product
- Launched in March, Zap by Paystack is a peer-to-peer money transfer app designed to target Nigeria’s consumer payments market
- Though Zap reportedly operates through a banking partner, Titan Trust Bank, the central bank views its functionality as breaching regulatory limits
Nigeria’s Central Bank (CBN) has fined leading fintech firm Paystack ₦250 million ($190,000) for allegedly operating its new consumer product, Zap, in violation of its regulatory licence, according to a source familiar with the matter.
Launched in March, Zap by Paystack is a peer-to-peer money transfer app designed to target Nigeria’s consumer payments market. The CBN asserts that Zap functions as a deposit-taking wallet—an activity permitted only for microfinance banks or deposit-taking institutions. Paystack holds a switching and processing licence, which does not allow it to hold customer funds.
Though Zap reportedly operates through a banking partner, Titan Trust Bank, the central bank views its functionality as breaching regulatory limits. Paystack confirmed it is working with regulators but declined to comment publicly. This is Paystack’s most significant regulatory sanction since receiving its licence in 2016 and reflects growing scrutiny as fintechs move from B2B to consumer-facing services.
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Key Takeaways
The fine against Paystack highlights rising regulatory pressure on fintechs in Nigeria, especially as they launch consumer products resembling traditional banking services. The line between permissible functionality under switching licences and deposit-taking activities has drawn increased focus from the CBN. Zap’s launch follows a broader trend of fintechs targeting P2P transfers, digital wallets, and personal finance, spaces traditionally reserved for banks and licensed microfinance institutions. By partnering with Titan Trust Bank, Paystack may have sought to remain compliant, but the CBN appears intent on reinforcing licensing boundaries. The timing is notable: in the past year, Nigerian fintechs, including Moniepoint and OPay, have faced fines of ₦1 billion each over compliance breaches. The regulatory environment reflects both the growing influence of fintech in Nigeria’s financial system and the CBN’s effort to preserve stability and consumer protection amid rapid digital innovation.
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