The Central Bank of Nigeria has lifted a six-week-long ban on onboarding new customers imposed on five of the country’s most prominent fintech startups: Paga, OPay, Kuda, Palmpay, and Moniepoint.
The regulator’s directive to freeze new customer signups first came on April 29, 2024, days after over 1,000 accounts were blocked for peer-to-peer crypto trading. The country’s National Security Adviser (NSA) also categorised crypto as a security concern and was keen to have the fintechs ramp up Know Your Customer (KYC) and fraud measures to prevent crypto transactions going through the fintechs.
On May 20, 2024, the fintechs were given several conditions for the onboarding freeze to be lifted including asking them to block P2P crypto transfers and mandating physical address verification for all tiers of accounts. The fintechs were also asked to update their facial verification for customers.
The fintechs have been disproportionately criticised for lax KYC measures that have led to fraud, but recent reports suggest that the battle against fraud is an industry-wide issue.
Nonetheless, the fintech startups will be happy with today’s decision which crippled growth for weeks and stopped them from onboarding thousands of customers.
