Since its launch last month, Zap by Paystack has been widely discussed--including Zap Africa's claims that Paystack uses it trademarked name "Zap". Now, Paystack is setting the record straight about a misconception: The company says Zap is not a remittance app.
This is in response to a recent report claiming the product launched without the necessary IMTO (International Money Transfer Operator) license from the CBN. Paystack says that the claim is based on a misunderstanding of how card payments and remittances function.
The cause of confusion? The app, which is designed to facilitate rapid and secure bank transfers, also allows users to fund Nigerian bank accounts using foreign cards.
So, how does Zap do foreign transactions? The core distinction, according to Paystack, is that Zap facilitates card-based transactions, not cross-border money transfers.
While the process may look like an international remittance to the average user, what’s actually happening is a card payment that is processed locally by Paystack and settled in Naira.
The FX part? That’s handled by the cardholder’s bank, not Paystack. All Paystack gets is Naira — absolving it of any currency conversion obligations.
So, what do you think about this Paystack's consumer app; is it a remittances service or it's just offering remittances service? Let's know your opinion in the comments section.
Here’s how Paystack puts it:
A user selects Apple Pay as their payment method → Apple Pay generates a secure tokenised card (a digital version of a debit or credit card) → Paystack processes the transaction locally → The transaction is acquired locally in Naira and settled into a Nigerian bank account.
Paystack also says they gave CBN a heads-up before launch and built Zap entirely on existing, CBN-approved infrastructure.
