How KYC concerns prompted the CBN to recently prohibit Opay, Kuda, and two other fintechs
The fintech companies include Palmpay, Kuda, Opay, and Moniepoint.
Financial institutions in Nigeria have been rocked by the Central Bank of Nigeria’s recent directive to cease fintechs’ onboarding of new clients.
The Central Bank of Nigeria (CBN) ordered four fintechs, Opay, Moniepoint, Kuda, and Palmpay, to stop integrating new clients due to Know-Your-Customer (KYC) concerns yesterday, according to multiple people with knowledge of the situation. This directive is in effect until further notice.
Simply put, KYC stands for “Know Your Customer,” and it’s a procedure that every banking institution must follow in order to verify and obtain further personal data, such as name, phone number, email address, and residential address.
Recall that on December 1, 2023, the apex bank sent financial institutions a circular directing them to put all funded accounts or wallets without a BVN or NIN on “Post No Debit or Credit,” which would take effect on March 1, 2024.
Some of the industry’s top fintech companies, like Palmpay and Opay, began contacting their clients to update their KYC information in order to meet the CBN deadline for KYC enforcement.
The use of Bank Validation Numbers (BVN) and National Identity Numbers (NIN) prior to wallet generation was mandated by OPay and PalmPay in December 2023.
Although he supported the CBN decision, PalmPay’s Managing Director, Chika Nwosu, stated that the company was dedicated to maintaining compliance and promoting a safe financial ecosystem.
“As a progressive fintech platform, we are confident this action will improve user data safety and wallet privacy overall while delivering smooth financial services.” He continued
Additionally, Opay issued a directive informing its clients that, as of March 1, 2024, it would block accounts that were not updated with NIN. According to the company, accounts lacking a NIN would be blocked.
Ikponmwosa Odiase, Opay’s director of partnerships, claims that each and every one of its tier-1 account owners has
The use of Bank Validation Numbers (BVN) and National Identity Numbers (NIN) prior to wallet generation was mandated by OPay and PalmPay in December 2023.
Although he supported the CBN decision, PalmPay’s Managing Director, Chika Nwosu, stated that the company was dedicated to maintaining compliance and promoting a safe financial ecosystem.
“As a progressive fintech platform, we are confident this action will improve user data safety and wallet privacy overall while delivering smooth financial services.” He continued
Additionally, Opay issued a directive informing its clients that, as of March 1, 2024, it would block accounts that were not updated with NIN. According to the company, accounts lacking a NIN would be blocked.
A source at one of the impacted fintechs reportedly told The Punch that the CBN’s order to review their KYC procedures has caused a brief halt to the onboarding of new clients.
The source further stated that the impacted fintechs were expecting additional guidance from the CBN, even though there was no formal deadline for any settlements.
