CBN Lifts Restrictions on New Account Openings for OPay, Moniepoint, and Others

What’s this about?

• The Central Bank of Nigeria (CBN) has lifted the ban on new account openings for OPay, Moniepoint, Kuda, PalmPay, and Paga, which was initially imposed to combat fraud in the industry.
• The ban was lifted after the fintech companies satisfied the CBN’s KYC standards, following meetings with the National Security Adviser, the Economic and Financial Crimes Commission, and the CBN.
• In response to regulatory requirements, the fintechs have enhanced their KYC processes, including implementing facial verification, physical address verification, and updating customer details to prevent fraud and ensure compliance.

Zoom in…

The Central Bank of Nigeria (CBN) has lifted the ban on new account openings placed on OPay, Moniepoint, Kuda, PalmPay, and Paga.

Context

In April 2024, the CBN directed all five fintechs to pause onboarding new customers as part of efforts to combat fraud in the industry.

“It is imperative to reiterate that OPay strictly adheres to the approved KYC verification processes and urges our esteemed customers to ensure that the due verification processes is followed for all accounts and all requirements are completely fulfilled,” a statement on OPay’s social media handles read.

Lifting the ban could be linked to the fintechs satisfying KYC standards required by the CBN. In April 2024, the CBN froze 1,146 bank accounts linked to unauthorised forex transactions. In May, the neobanks met with the National Security Adviser (NSA), the Economic and Financial Crimes Commission (EFCC), and the CBN to discuss lifting the ban on new customer onboarding.

Authorities mandated the neobanks to restrict peer-to-peer crypto transactions. They were also instructed to update customer details and require bank verification or national identity numbers for all tiered accounts.

This followed a December 2023 directive that mandates valid identification for all account types to strengthen KYC processes, which were initially relaxed to promote financial inclusion.

Bottomline

Consequently, PalmPay introduced facial verification and began physically visiting merchants to verify their addresses, while Kuda asked customers to upload proof of their home addresses.

OPay also implemented physical address verification for all merchants using OPay Business, with staff visiting locations to assist with the process. Merchants were advised to be security conscious and verify the identity of personnel conducting the verification to prevent impersonation or fraud.

This news will come as a relief for the neobanks, who have seen operations disrupted since the ban was placed, but it still casts a shadow on the country’s regulatory landscape.

Source: techpoint.africa