Launched in March, Zap promised flawless bank transfer, and at first, it looked like Paystack had cracked a long-standing pain point in Nigeria’s broken payments experience. But behind the scenes, the product was already raising red flags.

According to TechCabal, the CBN took issue with Zap functioning like a wallet, something Paystack isn’t licensed to operate. 

Instead, Paystack holds a “switching and processing” licence, which strictly limits it to moving money, not holding it. That role is reserved for microfinance or commercial banks. And that’s where the problem began.

Someone familiar with the situation told TechCabal that the CBN sees Zap as “a deposit-taking product,” which clearly crosses the line. In the regulator’s eyes, Paystack overstepped and broke the rules.

The fintech isn’t denying there’s a regulatory matter in play, but it’s keeping things close to the chest. “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,” a spokesperson at Paystack told TechCabal.

This isn’t Paystack’s first brush with controversy over Zap, but it’s certainly the costliest. The fine is the most severe regulatory sanction the company has faced since it got CBN’s licensing to operate in 2016.

Even more concerning is the context. Nigeria’s financial services sector is undergoing an aggressive compliance revamp. OPay and Moniepoint were each fined N1 billion in Q2 2024, and this current issue shows the regulator isn’t slowing down.

Beyond compliance, Zap is also having issues with branding.

Just hours after the unveiling of Zap, another startup, Zap Africa, accused Paystack of hijacking its name. And they’ve taken it to court. “We’ve been building Zap for 3 years now, intentionally and with full ownership. The name is trademarked. The product is live. The community is real,” said Moore DH, co-founder of Zap Africa, in a statement on X. 

His co-founder, Tobi Asu-Johnson, added: “Our name is trademarked and we’re on it. Zap’s legal team will be reaching out to Paystack shortly.”

That case is still ongoing, with Paystack yet to comment on the trademark issue. Meanwhile, users on social media have not been kind. Many pointed out how a Stripe-backed company—with significant resources—could miss something as basic as a naming conflict in its own industry. “They saw it. They just didn’t take them serious,” one user said.

To make things worse, fresh allegations have surfaced. There are concerns that Zap facilitated cross-border payments without proper licensing—potentially violating not just Nigerian rules but also regulations from the UK’s Financial Conduct Authority. That could bring international issues, and Paystack knows it.

According to reports, the CBN has now demanded a full audit of Zap, from the service architecture to every third-party partner involved. Titan Trust Bank, which reportedly holds customer deposits on behalf of Zap, is also being looked at closely.

Less than 48 hours after unveiling what it said results from 23 months of meticulous development, the fintech giant is being called out for allegedly stepping on toes. Specifically, the toes of Zap Africa, a smaller but earlier player in the same space.

Let’s cut straight to it: there’s already a company called Zap Africa (@getzapnow) operating in the fintech space. They’ve been around, building steadily for about three years. They own the domain, they claim to have the name trademarked, and now they’re publicly accusing Paystack of brand infringement.

“We’ve been building Zap for 3 years now, intentionally and with full ownership. The name is trademarked. The product is live. The community is real,” Moore DH, co-founder of Zap Africa, wrote on X.

His co-founder, Tobi Asu-Johnson, was just as direct: “Our name is trademarked and we’re on it. Zap’s legal team will be reaching out to Paystack shortly. Huge shoutout to everyone who brought this to our attention.”

That’s not the kind of language startups throw around lightly — especially when it involves legal teams and trademark enforcement.

But the internet wasn’t just watching; it was digging. Within hours, users found the existing Zap Africa platform, questioned the due diligence of Paystack’s research team, and generally took turns roasting the oversight. One user put it plainly: “They saw it. They just didn’t take them serious.”

It’s a serious take, but users raised an important point: how does a company backed by Stripe, with the kind of resources and talent Paystack has, roll out a product without catching that a namesake already exists in the same region — and industry?

“After 23 months of meticulous product review and design, one can’t help but wonder… how did Paystack overlook another payment platform, Zap?” asked Morris Monye. “Was it a simple oversight, or did they deliberately choose to ignore it? The plot thickens!”

This is now a test of how big tech companies treat smaller ones in the space, with one X user stating, “It’s giving ‘copy copy’.”

So where does this leave Paystack? Quiet, for now. No statement. No clarification. No public acknowledgement of the storm online. But we are following up.

While the dust hasn’t settled, it is obvious that names matter. Ownership matters. And in an industry built on trust and identity, this has gone beyond a branding blunder, to a credibility challenge.

It’s the 21st century, but bank transfers can still be an exercise in frustration—delays, failed transactions, app logins, and the dreaded “network issues.” But what if transfers could be as smooth as sending a text message? What if you could move money across banks in seconds, without the usual stress?

That’s the question Paystack asked itself, and the answer is Zap—a product designed with ruthless focus on one thing: bank transfers that just work. No fluff, no distractions.

At “An Evening with Paystack,” the company unveiled Zap with a live Demo that gives you instant trust for the product.

“What would it take to start and finish a transfer within 30 seconds? What would it take for this to work every single time? And wouldn’t it be great if I could just link all my accounts so I don’t have to even log into my bank?” 

That was the thought process behind Zap, as Shola Akinlade, co-founder and CEO of Paystack explained. The goal? Speed, reliability, and seamlessness. Not a new bank, not a financial super-app—just a frictionless way to send money instantly.

Zap allows users to link multiple bank accounts in one place, removing the need to constantly switch apps. So groceries, splitting bills, or handling recurring payments is easier with Zap, ensuring money moves fast, without the usual banking gymnastics.

But interestingly, Zap isn’t just for Nigerians. Paystack has built it to work for non-residents and visitors as well. A user with a Bank of America account can send money to a Nigerian bank account via Apple Pay in seconds.

That’s a first in the Nigerian fintech space.

Beyond Zap, The Paystack Empire Expands

While Zap stole the spotlight, Paystack had a lot more to say about its progress. Over the past year, the company has doubled down on three things:

1. Infrastructure reliability
2. Helping businesses scale across Africa
3. Building tools that drive business growth

Here’s what that looks like in numbers:

• In Q4 2024 alone, Paystack’s API processed over 3 billion requests, with an uptime of 99.9927%—just 9.5 minutes of downtime in an entire quarter.
• Transaction speed has doubled, with API latency dropping from 446 milliseconds to 254 milliseconds—essentially responding in a quarter of a second.
• Bank transfers via Paystack Titan now surpass Visa, Mastercard, and Verve on its platform—98% of these transfers are confirmed within 10 seconds.
• For airlines (all local airlines in Nigeria now use Paystack), 92% of refunds are processed instantly.

That last metric is particularly commendable. Few payment companies globally can claim instant refunds as a standard.

Again, Paystack now holds payment licenses in Ghana, Kenya, South Africa, Egypt, and Rwanda, with more on the way.

Paystack Passkeys: You Can’t Steal My Password if I Don’t Have One

One of the biggest surprises of the night was Paystack Passkeys—a security upgrade that ditches passwords altogether.

Instead of remembering (and forgetting) complicated passwords, Paystack users can now log in using biometric authentication (Face ID, fingerprint, or device PIN). This means:

• No more phishing risks – Since there’s no password to steal, hackers have a harder time gaining access.
• Faster logins – No more typing long credentials or dealing with one-time passwords (OTPs) that sometimes don’t arrive.
• Stronger security – Passkeys use cryptographic authentication, making them far more secure than traditional passwords.

With this, Paystack is joining global giants like Google, Apple, and Microsoft in adopting passkeys as the future of online security.

The company’s vision has always been bigger than just processing payments. It is obsessed with helping businesses win, and 2024 saw several key upgrades:

1. Paystack Terminals: The Next Phase of In-Person Payments

With the introduction of Paystack Terminals, merchants can now accept payments via card, Apple Pay, Google Pay, and contactless methods seamlessly. This isn’t just another POS system—it’s deeply integrated into the Paystack ecosystem, ensuring businesses have real-time visibility on every sale.

2. Fraud Prevention, But Smarter

Fraud is a huge challenge in digital payments, but Paystack has been aggressive in tackling it. The company’s fraud detection system has evolved to predict and block fraudulent transactions with greater accuracy, reducing fraud losses for merchants.

3. Paystack Business Banking

A lesser-known but highly impactful update—businesses on Paystack can now manage their finances, payments, and reconciliations all in one place, making cash flow management significantly easier.

Paystack envisions becoming Africa’s most preferred fintech infrastructure provider. Payments, business tools, banking—everything is being interconnected, making it easier for businesses to scale across markets.

And this is just the beginning.

“Over the course of the year, we’ll be expanding Zap to more countries across Africa. The next time I show up in Kenya, for example, I’ll be able to pay someone on M-PESA via Zap,” Akinlade revealed.

Zap is a huge one for both individuals and businesses. It strips away the inefficiencies of bank transfers, providing a faster, more reliable alternative that simply works.

For Paystack, however, this launch is about something much bigger—bolstering its part as the infrastructure layer powering Africa’s financial sector.

With a track record of high reliability, a growing suite of business tools, and now a consumer-facing product like Zap, Paystack is reiterating the fact that the sustainability of fintech in Africa will be built here, and they plan to lead it.