FOLLOWING the Central Bank of Nigeria (CBN) directive on strengthening Know Your Customer (KYC) procedures for Tier 1 accounts, fintech company PalmPay is encouraging users who have not yet complied with the requirements to do so promptly.
Since the introduction of the directive last December, PalmPay has launched a new onboarding flow on the app, which mandates all Tier 1 users to validate their National Identification Number (NIN) or Bank Verification Number (BVN). Failure to do so means that the user will not be able to complete their registration on the wallet.
It said existing users who have validated their NIN or BVN previously must revalidate their KYC information by January 31.
Existing users who have not yet validated their NIN or BVN must do so by March 31, adding that defaulting wallets will be frozen by January 31 and March 31, respectively.
According to Chika Nwosu, PalmPay Nigeria Managing Director, “We are committed to doing our part to foster a secure financial ecosystem. We urge all PalmPay users to update their KYC information on the app as soon as possible in order to ensure smooth continuation of service for their wallets.”
The company has introduced an incentive payment of up to N500 for users who get ahead of the deadline and validate their information. Also, support operations have been beefed up to help its customers through the process.
Similarly, OPay, a Nigerian financial technology firm, says fraudulent accounts will be removed from its system from March 1, 2024.
At a news conference on Wednesday, the mobile money firm said customers whose accounts are not KYC compliant will also be blocked.
KYC is a process by which banks obtain information about the identity and address of their customers.
This process helps to ensure that banks’ services are not misused.
Opay said the decision became necessary to reinforce the security of the platform and protect the deposits of customers from fraudulent individuals.
The move comes a month after a report revealed gaps in the company’s registration and verification process for new customers.
Addressing the concerns, Olayemi Precilia, director of cards business, said security measures have been upgraded on the platform as new customers will now require the national identity number (NIN) for account opening.
“When you log into your app and you have a Tier 1 account and you don’t have your NIN, it will ask for your NIN. You cannot move forward without inputting that NIN. So, that is one of the things we’ve already done,” she said.
“The second thing is, for new customers, you’re going to start off with the NIN. That’s what we’re implementing. So, we’re pulling information from your NIN into your wallet. That is going live next month.
“And we have a timeline—March 1st—wherein anyone who is not compliant will be locked out.”
The CBN had earlier warned that bank accounts that are not linked to a bank verification number (BVN) and national identity number (NIN) by April 2024 will be frozen.
The CBN gave this warning on Friday, December 1, 2023, in a circular sent to banks. It said this new directive is to “promote financial system stability and strengthen the Know Your Customer procedures in all financial institutions,” but analysts believe there seems to be more to it.
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