Paystack, the fintech giant, known for its business-focused payment solutions, is now shifting toward consumer transactions, betting on Zap to drive its next growth phase.
Zap, a newly launched app by Paystack simplifies money transfers by allowing users to send funds to any Nigerian bank account within 10 seconds. Users can fund their accounts through Paystack’s direct debit infrastructure or by depositing money into a Paystack-Titan Trust Bank account.
“We have a partnership already with Titan Trust Bank, and we extended that partnership to Zap,” said Shola Akinlade, CEO of Paystack.
Paystack’s entry into consumer payments aligns with its broader goal of controlling the financial ecosystem within its network. With over 58% of transactions on Paystack now being bank transfers, up from 28% in 2022, the company has heavily invested in bank-to-bank payments. Its closed-loop model, where funds move entirely within Paystack’s ecosystem, could further streamline online transactions.
“What’s important is building reliable infrastructure: starting from the bottom with the infrastructure, then delivering great experiences, then crossing borders,” Akinlade explained.
With an interface designed for speed and simplicity, Zap’s homepage prioritizes the “Send Money” function, removing unnecessary complexities. Akinlade emphasized the importance of making transactions effortless, stating, “I should pull out my phone without going through multiple steps. That’s it.”
Zap Africa CEO Reacts
While Paystack’s Zap is gaining attention, its name has sparked controversy. Tobiloba Asu-Johnson, CEO of Zap Africa, expressed frustration and disbelief over Paystack’s choice to use the “Zap” name, alleging that his company has trademarked the brand name for years.
“A lot of my friends started reaching out, asking if we had partnered with them (Paystack). A couple of our users even tagged me and my co-founder under Paystack’s tweets. I was genuinely surprised and confused.”
Zap Africa, launched three years ago, operates as a decentralized cryptocurrency exchange designed to provide financial autonomy for Africans. Unlike Paystack, it is non-custodial, meaning that it does not hold customers’ funds.
“We’re non-custodial and have a zero-hold policy, meaning we don’t hold on to our users’ funds, no matter what,” Asu-Johnson explained.
The fintech entrepreneur argues that Paystack’s use of “Zap” creates confusion among users and dilutes his company’s brand identity. Zap Africa’s legal team has contacted Paystack, seeking an amicable resolution, with the company insisting on a name change.
“Ideally, we would like to see a resolution that eliminates customer confusion and upholds brand integrity. This would mean a name change from Paystack. While we respect Paystack and what they’re doing, at the end of the day, we expect a fair and responsible approach from them, and that, to us, is a name change.”
Beyond the legal aspect, Asu-Johnson believes this situation underscores a broader issue in the Nigerian fintech sector: the need for stronger brand protection and due diligence by larger companies.
“Industries and companies, especially the bigger ones, must take intellectual property and branding seriously. Too often, smaller brands are overlooked, and some companies assume they can get away with things like this. That needs to change.”
Zap Africa Threatens Legal Action Against Paystack
Zap Africa has formally threatened legal action against Paystack. Asu-Johnson confirmed that Zap Africa’s legal team is pursuing the matter, emphasizing that “our name is trademarked, and we’re on it.”
“Huge shoutout to everyone who brought this to our attention. Your support is invaluable!” he posted on X (formerly Twitter).
Zap Africa asserts that there is only one “Zap” in Nigeria and Africa, reinforcing its position that Paystack should rebrand its new product. However, Paystack has yet to issue a public statement regarding the controversy.
Zap Africa’s next legal steps remain to be seen, but Asu-Johnson has made it clear: “We do not want to have any conflict with any company, so we hope Paystack recognises and understands the impact of this and takes the appropriate steps to resolve it. However, we are prepared to explore all options to protect our brand.”
SEE ALSO: Paystack Rejects Zap Africa’s Trademark Claims, Issues Legal Notice
