Alex Omenye
The Central Bank of Nigeria has lifted a six-week ban on onboarding new customers for five of the country’s leading fintech startups: Paga, OPay, Kuda, Palmpay, and Moniepoint.
The ban, which began on April 29, 2024, followed the blocking of over 1,000 accounts involved in peer-to-peer crypto trading.
The National Security Adviser had categorized cryptocurrency as a security concern and urged the fintech companies to enhance their Know Your Customer and fraud prevention measures to curb crypto transactions.
On May 20, 2024, the CBN set several conditions for lifting the onboarding freeze, including the requirement for fintechs to block P2P crypto transfers, mandate physical address verification for all account tiers, and update facial verification processes for customers.
While fintechs have faced criticism for lax KYC measures leading to fraud, recent reports indicate that combating fraud is a broader industry challenge.
The lifting of the ban is a relief for the affected startups, whose growth was severely impacted, preventing them from onboarding thousands of new customers during the suspension.
