Central Bank of Nigeria (CBN) Punches Fintechs on BVN Validation

Central Bank of Nigeria (CBN) Punches Fintechs on BVN Validation

The Central Bank of Nigeria has frozen fintechs from using BVN (bank verification number) to validate and authenticate their users. That should not be a problem if the National Identity Management Commission (NIMC)’s NIN (national identity number) has gone mainstream. Yet, what the apex bank did is a good call because if indeed NIN is working, even BVN has to be discontinued. Companies must try to add the NIN field as quickly as possible. 

“We’ve recently been made aware of a regulatory directive from the primary custodian of Nigeria’s BVN service to all their partners to suspend the provision of the BVN validation service to their third-party partners. This directive affects every non-bank in Nigeria that offers BVN Validation services. In light of this news, we’re hereby informing you that the BVN Resolve service will be temporarily unavailable starting at midnight, April 8, 2021.”

Of course, the concern remains: if fintechs cannot use the most trusted tool in Nigeria to validate users, the implication is that no fintech can live without a bank-cousin, thereby making sure the “challenger” can only be challenging and never will be in a position of dominance! I do hope that the apex bank is not making such calls here.

 

All images from Nairemetrics

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7 thoughts on “Central Bank of Nigeria (CBN) Punches Fintechs on BVN Validation

  1. I don’t understand how this is a good call, do you presume the CBN intends to replace the functionality of BVN with NIN? I think that might be an overstretch.

    The fintech already had partner banks to operate for clearing and settlement.

    I would think BVN validation service would have been a necessary tool to improve on their data management as well as prevent fraud.

    How are they supposed to operate optimally without having accurate data?

    I honestly do not see any good in this, and this is increasing the entry burdens and chasing away credible players in the industry.

    The CBN needs to stop this political shenanigans.

    I stand to be corrected

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