Yemisi Izuora
The Central Bank of Nigeria has fined a Nigeria-based payment processor, Paystack, N250 million for launching Zap app without approval and facilitating international transfers without the relevant licences.
The CBN, imposed the stiff financial penalty on Zap over the consumer app’s unsanctioned operations of storing customers’ funds without obtaining the licence of a deposit bank.
Paystack’s Zap, launched in March, was tested by co-founder and CEO Shola Akinlade before a live audience to transfer funds to another account. Paystack, established in 2016, only has CBN’s approval to process money transfers but lacks the right and licence to keep funds like a commercial bank.
Zap by Paystack first got on the CBN’s radar after a trademark war erupted between the Stripe-owned company and Zap Africa.
Both entities clashed with each claiming to be the first company to register ‘Zap.’ But the trademark conflict soon ballooned into a bigger crisis for Paystack after financial regulators found that Zap was operating without approval and performing transactions beyond its scope.
International payment processors must first be licensed as International Money Transfer Operators (IMTO); a category Paystack’s Zap has yet to attain.