Nigerian Fintech company Opay has announced plans to enforce a stricter Know Your Customer (KYC) requirement starting from March 2024, to mitigate fraud on the platform.
This move is coming after the startup was scrutinized for revealing significant weaknesses in its platform. Multiple tests were reported to have exposed vulnerabilities, particularly in the facial identity system, raising concerns about the platform’s susceptibility to exploitation by malicious actors.
There was a viral video shared by a user displaying how users can open an account using other people’s bank account numbers.
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At that time, checks showed that OPay continued to allow new users to sign up to its platform without proper verification.
According to reports, during the onboarding process on the platform, people were allegedly allowed to impersonate others by opening accounts in their names.
Multiple tests show that OPay’s basic account verification process for tier 1 is weak, and the facial identity system is porous, which could allow bad actors to register for the service and begin carrying out transactions within 60 seconds.
In a bid to strengthen security on the platform, OPay has now initiated the enforcement of the Bank Verification Number (BVN) and National Identity Number (NIN) requirements for wallet opening. Customers whose accounts are not KYC compliant will be blocked.
In line with this, OPay announced its partnership with Nigerian financial services company Interswitch, to curb these issues. With the Interswitch Payment Gateway (IPG), the partnership seeks to reduce transaction friction by offering consumers a safe and easy way to make payments.
Opay beef of security on the platform is coming on the heels of the Central Bank of Nigeria’s (CBN) directives on Know-Your-Customer (KYC), mandating all accounts and wallets for individuals to have BVN and/or NIN before March 1, 2024.
CBN also mandated that no new accounts or wallets should be opened without BVN or NIN. The director, of Card Business, OPay, Priscilla Olayemi, averred that the company in adhering to these new directives, has commenced the first two stages of the KYC.
Explaining further, she stated that, users under tier one accounts, cannot log in to carry out financial transactions without providing their BVN or NIN.
Also, the director of partnerships OPay, I.K Odiase, posited that any fraudulent account will be removed from the OPay platform, beginning March 1, 2024, while pleading with customers to confirm that the information provided while opening their accounts matches the information in their NIN and BVN.
Amid growing concerns stemming from high-profile fraud incidents and critiques of lenient KYC standards, Nigeria is promoting financial system stability by reinforcing KYC procedures.
The new rules come as an amendment to Section 1.5.3 of the Regulatory Framework for Bank Verification Number (BVN) Operations and Watchlist for the Nigerian Banking Industry.
OPay’s proactive approach towards enhanced KYC and secure transactions demonstrates the startup’s commitment to protecting users and fostering a trustworthy financial ecosystem in Nigeria.