In the three weeks since Paystack launched Zap, its first consumer product, there has been a legal dispute with Zap Africa, a crypto startup, and dismissed claims that Zap lacked the Central Bank of Nigeria’s approval. In what has been a surprising first foray into the consumer market, a legal dispute between Paystack and Zap Africa could change how Nigeria’s legal system operates.
It took only a couple of minutes after Paystack’s much-awaited launch before Zap Africa tweeted: “There is only one Zap in Nigeria and Africa.” The company would later accuse Paystack of trademark infringement, claiming that the use of the name “Zap” causes confusion among users and dilutes its trademark.
“A lot of customers think we’re about to close down,” Tobi Asu-Johnson, Zap Africa’s CEO, told . “It has affected business. We were in the middle of our round, and it chased away investors who were going to help us with our seed round. It has also made people in the company unsure about their jobs.”
Shortly after its viral tweet, Zap Africa issued a cease and desist letter demanding that Paystack immediately stop using the name Zap. The March 26 letter asked Paystack to withdraw all product and marketing materials related to Zap, destroy any Zap-branded assets, issue a public apology, and cover Zap Africa’s marketing expenses—all within seven days.
The letter was based on Zap Africa’s trademark filings across Classes 35, 36, and 42, according to documents seen by . Class 35 covers advertising, business management, and retail, areas not directly tied to financial services. Class 36 covers financial and monetary services, while Class 42 relates to technology services.
Class 35 was approved in October 2023, Class 42 in June 2024, and Class 36, the most relevant to Paystack’s Zap, in March 2025. The trademarks contradict initial claims by some publications that Zap Africa’s trademark was irrelevant to financial services, potentially strengthening Zap Africa’s legal position.
But Paystack registered its trademark, Zap by Paystack, in December 2023 in Classes 36 and 42. The similarity between both companies’ names lies at the heart of the legal dispute, one that could potentially set a precedent and reshape how Nigeria’s trademark laws are interpreted and enforced in the tech sector.
“There’s a possibility that the application was accepted on the grounds of honest concurrent use, a statutory justification also recognised under the law,” Ebube Nnachi, an intellectual property lawyer, told . “Though having little precedence in Nigerian case law, this could have formed the basis for the Registrar’s decision to register the mark despite its similarity to a pre-existing one.”
In response to Zap Africa’s tweets and letter, Paystack issued a cease and desist notice to Zap Africa seen by , which demanded that Zap Africa immediately provide evidence of its trademark in Classes 9 (scientific, research and technological products class) and 36 (financial, insurance and real estate services class), cease all public communications about Zap Africa, and stop paying third parties to publish content about Paystack. The notice, issued on March 28, set a 48-hour deadline.
Several legal considerations under the Nigerian trademark system come into play in this dispute. First, a trademark must be distinctive to differentiate one business’s goods or services from another. This is central to the dispute, as Paystack and Zap Africa both use the name “Zap”, which could lead to consumer confusion.
“Since ‘ZAP’ is not inherently associated with finance, its use as a brand name in the financial sector may be viable,” Amosa Shukurat, an intellectual property consultant, said. “ However, distinctiveness is key—if a term is common or widely used in a specific industry, it may be challenging to secure trademark rights. Nonetheless, a term can acquire distinctiveness through consistent and prominent use, which could make it eligible for trademark protection over time.”
Paystack has argued that it registered a distinct brand—“Zap by Paystack”—rather than the standalone word “Zap”, and that this reduces the risk of confusion. It also pointed out that “Zap” has been used by different entities over time, making exclusive rights to the word difficult to claim.
More than 40 companies listed on the Corporate Affairs Commission (CAC) website include “Zap” in their business names. The term has also been trademarked by another proprietor as far back as 2008, long before the existence of either Paystack’s Zap or Zap Africa, said one Paystack employee who asked not to be named as they aren’t authorised to speak.
”In Nigeria, trademark rights follow the “first to file” rule, giving priority to the first party to register a mark,” William Umoh, a lawyer, said. “However, the Registrar may reject a later application if the marks are similar, in the same class, and could confuse. Despite this, similar marks might still get approved if they are stylised differently or the Registrar doesn’t find them confusingly similar.”
Another key consideration is the classification of goods and services under trademark law. Both startups hold trademarks in relevant classes, which complicates either side’s claim.
The timing of filings also matters in determining priority. Paystack filed its trademark in late December 2023, while Zap Africa filed a couple of months before Paystack. Nigerian trademark law typically grants rights to the first party to file, but prior use can sometimes override this rule.
“Now that the cease-and-desist period has elapsed, either party is within their rights to initiate legal proceedings,” Nnachi said “ Should that happen, the outcome could provide judicial guidance not just on the scope of the Registrar’s discretion but also on the application and reliance on the defence of honest concurrent use in Nigeria.”
The outcome of this trademark dispute will depend on factors like the distinctiveness of the marks, their class registrations, and the potential for market confusion. Given that both parties have failed to meet each other’s demands, it seems likely that the courts will have to decide whether any party has a legitimate claim to Zap.
