CBN Lifts Ban on New Customer Onboarding For Major Fintech Companies
The Central Bank of Nigeria (CBN) has lifted a six-week-long ban on onboarding new customers, which was imposed on five of the country’s leading fintech startups: Paga, OPay, Kuda, Palmpay, and Moniepoint.
The directive to halt new customer signups was issued on April 29, 2024, shortly after over 1,000 accounts were blocked due to peer-to-peer (P2P) crypto trading. The National Security Adviser (NSA) labeled cryptocurrency as a security concern, urging fintech companies to enhance their Know Your Customer (KYC) protocols and fraud prevention measures to block crypto transactions.
On May 20, 2024, the fintechs were given specific conditions to meet in order to lift the onboarding freeze. These included blocking P2P crypto transfers, verifying physical addresses for all account tiers, and updating facial verification systems for customers.
The fintech startups have faced significant criticism for allegedly inadequate KYC measures, contributing to fraud. However, recent reports indicate that combating fraud is a challenge affecting the entire industry.
Despite these challenges, the fintech startups are likely relieved by today’s decision, which had significantly hindered their growth and prevented them from onboarding thousands of new customers.
