In order to protect their customers, Fidelity Bank has blocked transfers to OPay, Moniepoint, and Palmpay over lax KYC concerns Tech Cabal is reporting.
You can read more here
https://techcabal.com/2023/10/25/fidelity-blocks-neobanks-over-kyc/?mibextid=Zxz2cZ
Let me explain what this means.
If you have a Fidelity bank account, you can’t initiate a bank transfer to any user using Opay, Palm pay, Monie Point, or Kuda from your bank app.
Let’s say you want to pay a vendor 50,000 this evening for the services he rendered to you, and the vendor is using an Opay account.
What Fidelity Bank is saying is simple.
Please, you can’t use our bank app to do that.
The reason is not far-fetched.
Fraudsters and Yahoo boys have found a safe haven using Monie Point, Palm pay, Opay, and Kuda to receive stolen funds because of lax KYC concerns on these platforms , and this is why
It is easier for them to open fresh new bank accounts at Palm pay, for instance, than at your regular conventional bank.
If you walk into a branch of Zenith Bank to open a new bank account, Zenith bank will ask you for a NEPA bill, a valid ID card, and then your passport photograph.
But for Kuda Bank, palm pay, Monie Point, or Opay, Fidelty bank is accusing them of a lax KYC regulations; hence it is very easy to commit fraud using their platforms.
Because of this lax KYC requirements from the neo banks, you can easily open an account with an Opay POS agent in less than 5 minutes without submitting the documents like the NEPA bill, which is called Know Your Customer, that a conventional bank would have asked you to provide.
The implication is that Yahoo boys and criminals have found a safe heaven using Monie Point and Kuda bank accounts, for instance, to scam people because they are easier to open and because of this lax KYC requirements.
My friend Maduka Fidorocks Onwukeme once shared with me how his bank account was compromised and hacked, and the money was swiftly moved to a newly minted Opay account.
One thing that struck him when he started investigating using his legal skills as a Lawyer was that the Opay account that received the stolen money was created 30 minutes before the hackers struck and moved the money there.
Opay did not bother to ask for KYC (know your customers attached to the new account), so the perpetrators were unknown.
He also discovered that, in a flash of light, the money was withdrawn in less than 20 minutes through a POS agent. Immediately, it hit the new Opay account from his account, but this did not stop him from writing to CBN to complain that his money was stolen by non-state actors and that Opay was complicit due to their carelessness.
In less than 2 weeks after he filed his petition with CBN, the money stolen from his account was replaced by Opay.
And my friend is not an outlier.
Since their footprints can’t be traced, scammers are comfortable using these 4 bank accounts to receive stolen funds, which they withdraw immediately through a POS agent, and this is a regular daily occurrence.
Away from these anti-fraud systems, there are valid questions about whether a bank can unilaterally restrict transfers to another bank, and the CBN Customer Due Diligence Regulations 2023 is silent on the matter. Existing regulations state that banks should have a risk management framework in place to identify and mitigate the risks.
It is unclear whether Fidelity Bank communicated to the CBN before it began restricting accounts.
Sources close to the situation say the bank likely acted without the regulator’s consent. “They can silently do it. If your house is about to burn down, you have to save yourself,” an industry leader told TechCabal. “Even if the regulators ask the bank, they would deny it and say they are having a technical issue. ”
In summary, to prevent their customers from falling into the hands of criminal elements using Opay, Monie Point, Palm pay and Kuda to receive stolen funds, Nneka Onyeali-Ikpe, the CEO of Fidelity Bank attached below, thought it wise to block these 4 NEO banks from the Fidelity Bank app.
Just to protect her customers.
And I think she deserves our commendation and applause as well for this.
She has done well!
