Nigerian Fintechs Cut Off From Government Verification Service
The Nigerian government has made things tricky for fintech companies and even trickier for crypto companies. Nigerian fintech companies were on Friday suddenly cut off from a government service they need to perform mandatory identity checks on their customers. While they wait for the government to install a revamped identity system, fintech companies can‘t legally onboard new customers or must switch to services that don’t require identity checks, such as peer-to-peer services, analysts told Decrypt. “The timing of this move couldn‘t be worse, especially given all the recent regulatory obstacles that fintech has faced this year, like the ban on banks dealing with crypto,” Oluwaseun Opeyemi, a lawyer in Nigeria’s capital Lagos, told Decrypt. The sudden blackout adds yet another hurdle for crypto companies. “Not very encouraging signs for foreign investment in Nigeria,” said Opeyemi. Switching off the lights Like so many other countries, Nigerian law requires fintech companies to verify their customers‘ identity. To do so, businesses in Nigeria rely on the government’s seven-year-old verification database, the Bank Verification Number (BVN). But a regulatory directive on Friday suspended fintech companies access to the BVN without warning. The government hasn‘t explained why, but it’s likely because the government is replacing its patchwork network of identity systems, of which