Economy

How Paystack Launched Zap Without CBN Approval

BySodiq Yusuf

PublishedApril 8, 2025

Paystack, one of Africa’s most celebrated fintech companies, has found itself at the centre of a regulatory storm following the launch of its consumer-facing mobile application, Zap.

Unveiled on March 24 during a high-profile event tagged An Evening With Paystack, the product promised seamless transfers, wallet functionalities, and cross-border transactions.

However, what was billed as a milestone moment for the Stripe-acquired company has quickly turned into a reputational crisis, as it emerged that the app was launched without prior approval from Nigeria’s apex financial regulator, the Central Bank of Nigeria (CBN).

According to an investigation by Big Tech This Week, “No approval was granted” by the CBN for the launch of Zap.

The app, which allows users to link bank accounts, fund wallets using international cards, and make near-instant transfers, falls under regulatory categories requiring explicit clearance.

When contacted, a source within the CBN confirmed, “They definitely need CBN approval,” stating that Paystack’s existing payment and switching licences do not cover the launch of new consumer products without prior notification and formal authorisation.

The CBN has since requested a full list of Zap’s service architecture, third-party partners, and a formal product application.

The regulatory breach is not the only cloud hanging over Zap’s debut. Almost immediately after launch, a public trademark dispute erupted between Paystack and a Nigerian startup, Zap Africa.

In a statement posted to social media, Zap Africa asserted, “There is only one ZAP in Nigeria and Africa,” igniting a war over brand ownership.

As Big Tech This Week reported, both companies have submitted trademark applications across multiple classes, including the coveted Class 36 covering financial services.

However, discrepancies in filing dates and overlapping claims have complicated matters, with the Ministry of Industry, Trade & Investment yet to make a definitive ruling.

More troubling still are allegations that Zap has been facilitating cross-border transactions without appropriate authorisation. Big Tech This Week further revealed that transfers from UK-based accounts to Nigeria via Zap were successful, despite Paystack lacking both the Central Bank’s IMTO licence and registration with the UK’s Financial Conduct Authority (FCA).

When contacted, the FCA stated unequivocally, “Paystack is not listed as an affiliate or agent of Stripe in our database and therefore has no standing to offer cross-border remittances in or out of the UK.”

The agency warned that offering financial services in the UK without permission constitutes a criminal offence.

Sodiq Yusuf

Sodiq Yusuf is a trained media practitioner and journalist with considerable years of experience in print, broadcast, and digital journalism. His interests cover a wide range of causes in politics, governance, sports, community development, and good governance.