American financial technology company, Mercury, has announced plans to terminate the accounts of businesses based in several countries, including Nigeria, effective from August 22, 2024.
This decision comes as part of revised eligibility criteria for opening accounts, recently updated by the company.
In a list posted on its website, Mercury has identified 15 African nations among 37 countries worldwide where it will no longer offer services. Countries such as Russia are also included in this list. Additionally, Mercury will cease serving companies whose founders hold passports from countries like Belarus, Cuba, Iran, North Korea, Syria, Ukraine, and Venezuela.
Affected customers received emails notifying them of the upcoming account closures. Mercury expressed regret for any inconvenience caused and assured support during the transition period, stating:
“We support U.S. companies founded by people across the globe as well as founders and venture capital firms. However, we currently can’t open accounts for founders living in the following countries and regions…”
Customers have been advised to take necessary actions before the August 22 deadline, after which access will be limited to viewing account documents.
The company did not provide detailed reasons for these changes in eligibility criteria. Oo Nwoye, a prominent voice in the Nigerian tech community, expressed concerns on social media about the potential impact on fintech startups in the country, tweeting, “Hopefully it doesn’t affect all those our Multi Currency startups.”
This move is not the first time Mercury has taken action against African tech startups. Founded in 2017, Mercury serves over 100,000 businesses, with a significant portion being startups.
In a previous incident in March 2022, the company faced scrutiny over its practices concerning foreign account openings through its partner, Choice Bank. The FDIC raised concerns about accounts being opened in countries deemed legally risky, prompting Mercury to shut down accounts of numerous African tech startups, including many from Nigeria.
At the time, Mercury did not provide clear explanations for its actions nor did it issue warnings to the affected startups until concerns were publicly raised within the African tech ecosystem. CEO Immad Akhund later clarified that the company was adhering to internal procedures in compliance with regulatory standards.
Mercury’s decision underscores ongoing challenges faced by international startups navigating U.S. banking regulations, impacting businesses across diverse global regions.
