KYC: Opay to commence physical address verification for merchants

Opay to commence physical address verification for merchants
An OPay agent with POS completing a transaction with a customer. Source:

Fintech company, Opay has informed customers that it will commence a physical address verification exercise for existing users on its platform soon. According to an announcement on its Twitter handle, this is in line with fulfilling the new CBN requirements.

According to the fintech company, this will involve its staff visiting merchants’ physical locations. Hence, the merchants should ensure to verify their identity:

“For your security, please ensure that you verify the identity of our personnel to prevent any possibility of impersonation or fraud. Our staff will carry proper identification (Opay ID card, Lark Business Card, BD tool or General Agent Platform) for this purpose”, the statement adds.

Opay to commence physical address verification for merchants

This follows an earlier announcement by the Central Bank of Nigeria (CBN) today that mobile money operators including fintech firms like OPay, Palmpay, Kuda Bank, and Moniepoint will resume the enrolment of new customers “in another couple of months”.

Governor, Olayemi Cardoso, stated this after the 295th Monetary Policy Committee (MPC) of the apex bank in Abuja. Mr Cardoso told the media that the apex bank had engaged many of the players on the need to strengthen their operations. The Governor explained that the bank is introducing “remedial measures that will help that sector to tighten up on onboarding and even existing clientele base” that will block money laundering and illicit flows.

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“I am confident that as time goes on, and hopefully in another couple of months, all these will be something of the past and then you will see that sector going back into what they’ve been known to do before, but certainly with a very stronger regulatory framework,” he said.

Recall that in April, the Central Bank of Nigeria ordered mobile money operators including fintech firms from onboarding new customers until further notice. The directive affected fintech companies such as OPay, Palmpay, Kuda Bank, and Moniepoint, from opening new accounts.

The CBN’s move was linked to an audit of the Know-Your-Customer (KYC) process of the fintech companies. Analysts believe that these companies have been under scrutiny in recent months over concerns around money laundering and terrorism financing.

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Central Bank Governor, Olayemi Cardoso

Following the CBN announcement, platforms like OPay warned customers against using their accounts to facilitate cryptocurrency transactions.  In a statement, the company said that it will close accounts involved in crypto trading in line with a directive from the Central Bank of Nigeria (CBN).

We did not target fintech companies like Opay, Kuda, Palmpay- CBN Governor, Cardoso

In response to questions by media representatives at the MPC meeting on why the apex bank took the decision, Mr Cardoso said that the decision was not intended to clamp down on the neobanks.

He explained that the fintech companies were not singled out for an exceptional kind of treatment but emphasised that “Regulation is very critical in a sector that seems to have grown so incredibly rapidly”.

He reiterated that the focus of the CBN was to stem the flow of illicit funds and combat money laundering:

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“We were concerned about the issue of anti-money laundering and illicit flows as they made their way within the various sub-sectors of the financial industry and we felt there was a need for us to take a breather and work with different players to strengthen regulations. It is not by any means to throw them out of business”, he explained.

“Let me re-emphasise that at this point, we have not revoked the licenses of any of the fintech organisations”, he added.

Read also: Opay, Kuda and 4 other African companies make CNBC’s top 200 global fintech list

Opay last announcement indicates compliance with the Central Bank’s demand for better KYC processes to prevent money laundry and illicit cash flow. Recall that the apex bank reportedly summoned some of the heads of the leading fintech companies to its head office in Abuja, last month, to discuss issues around their KYC processes.

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