Within the three weeks since Paystack launched Zap, its first shopper product, there was a authorized dispute with Zap Africa, a crypto startup, and dismissed claims that Zap lacked the Central Financial institution of Nigeria’s approval. In what has been a stunning first foray into the patron market, a authorized dispute between Paystack and Zap Africa might change how Nigeria’s authorized system operates.
It took solely a few minutes after Paystack’s much-awaited launch earlier than Zap Africa tweeted: “There is just one Zap in Nigeria and Africa.” The corporate would later accuse Paystack of trademark infringement, claiming that using the title “Zap” causes confusion amongst customers and dilutes its trademark.
“Quite a lot of clients assume we’re about to shut down,” Tobi Asu-Johnson, Zap Africa’s CEO, informed TechCabal. “It has affected enterprise. We have been in the midst of our spherical, and it chased away traders who have been going to assist us with our seed spherical. It has additionally made folks within the firm not sure about their jobs.”
Shortly after its viral tweet, Zap Africa issued a stop and desist letter demanding that Paystack instantly cease utilizing the title Zap. The March 26 letter requested Paystack to withdraw all product and advertising supplies associated to Zap, destroy any Zap-branded property, problem a public apology, and canopy Zap Africa’s advertising bills—all inside seven days.
The letter was based mostly on Zap Africa’s trademark filings throughout Lessons 35, 36, and 42, in keeping with paperwork seen by TechCabal. Class 35 covers promoting, enterprise administration, and retail, areas circuitously tied to monetary providers. Class 36 covers monetary and financial providers, whereas Class 42 pertains to know-how providers.
Class 35 was permitted in October 2023, Class 42 in June 2024, and Class 36, essentially the most related to Paystack’s Zap, in March 2025. The logos contradict preliminary claims by some publications that Zap Africa’s trademark was irrelevant to monetary providers, doubtlessly strengthening Zap Africa’s authorized place.
However Paystack registered its trademark, Zap by Paystack, in December 2023 in Lessons 36 and 42. The similarity between each corporations’ names lies on the coronary heart of the authorized dispute, one that might doubtlessly set a precedent and reshape how Nigeria’s trademark legal guidelines are interpreted and enforced within the tech sector.
“There’s a chance that the applying was accepted on the grounds of sincere concurrent use, a statutory justification additionally recognised beneath the regulation,” Ebube Nnachi, an mental property lawyer, informed TechCabal. “Although having little priority in Nigerian case regulation, this might have fashioned the idea for the Registrar’s resolution to register the mark regardless of its similarity to a pre-existing one.”
In response to Zap Africa’s tweets and letter, Paystack issued a stop and desist discover to Zap Africa seen by TechCabal, which demanded that Zap Africa instantly present proof of its trademark in Lessons 9 (scientific, analysis and technological merchandise class) and 36 (monetary, insurance coverage and actual property providers class), stop all public communications about Zap Africa, and cease paying third events to publish content material about Paystack. The discover, issued on March 28, set a 48-hour deadline.
A number of authorized concerns beneath the Nigerian trademark system come into play on this dispute. First, a trademark should be distinctive to distinguish one enterprise’s items or providers from one other. That is central to the dispute, as Paystack and Zap Africa each use the title “Zap”, which might result in shopper confusion.
“Since ‘ZAP’ just isn’t inherently related to finance, its use as a model title within the monetary sector could also be viable,” Amosa Shukurat, an mental property marketing consultant, stated. “ Nevertheless, distinctiveness is essential—if a time period is frequent or broadly utilized in a selected business, it might be difficult to safe trademark rights. Nonetheless, a time period can purchase distinctiveness by means of constant and distinguished use, which might make it eligible for trademark safety over time.”
Paystack has argued that it registered a definite model—“Zap by Paystack”—quite than the standalone phrase “Zap”, and that this reduces the chance of confusion. It additionally identified that “Zap” has been utilized by totally different entities over time, making unique rights to the phrase tough to say.
Greater than 40 corporations listed on the Company Affairs Fee (CAC) web site embody “Zap” of their enterprise names. The time period has additionally been trademarked by one other proprietor way back to 2008, lengthy earlier than the existence of both Paystack’s Zap or Zap Africa, stated one Paystack worker who requested to not be named as they aren’t authorised to talk.
”In Nigeria, trademark rights comply with the “first to file” rule, giving precedence to the primary occasion to register a mark,” William Umoh, a lawyer, stated. “Nevertheless, the Registrar could reject a later utility if the marks are comparable, in the identical class, and will confuse. Regardless of this, comparable marks would possibly nonetheless get permitted if they’re stylised in another way or the Registrar doesn’t discover them confusingly comparable.”
One other key consideration is the classification of products and providers beneath trademark regulation. Each startups maintain logos in related courses, which complicates both facet’s declare.
The timing of filings additionally issues in figuring out precedence. Paystack filed its trademark in late December 2023, whereas Zap Africa filed a few months earlier than Paystack. Nigerian trademark regulation usually grants rights to the primary occasion to file, however prior use can generally override this rule.
“Now that the cease-and-desist interval has elapsed, both occasion is inside their rights to provoke authorized proceedings,” Nnachi stated “ Ought to that occur, the end result might present judicial steering not simply on the scope of the Registrar’s discretion but additionally on the applying and reliance on the defence of sincere concurrent use in Nigeria.”
The end result of this trademark dispute will rely upon components just like the distinctiveness of the marks, their class registrations, and the potential for market confusion. Provided that each events have failed to fulfill one another’s calls for, it appears doubtless that the courts must resolve whether or not any occasion has a reliable declare to Zap.
