I received the news that San Francisco-based Mercury Bank, a bank for startups, has restricted the accounts of many Africa-focused startups. The neobank has claimed that the restriction was due to “unusual activity” and possibly emanated from its supervisory bank partner, Evolve Bank & Trust. Accordingly, many startups woke up to receive this: “Hi, your access to the Mercury account for XX has been temporarily restricted. Let us know if you have any question or concerns.”
Statement from Immad Akhund, the neobank’s CEO:
- “I am the CEO of Mercury. Since many of you have emailed/messaged me directly I thought it would be best if I just reached out directly.
- “We found out yesterday that our partner bank noticed unusual activity and asked us to lock and investigate a large set of accounts with linked activity. We are working through our due diligence on all those accounts and will be in touch with you individually with questions if we have any on your account or activity.”
- “Since it’s a reasonably large set of accounts it’s taking us some time to work through all of them but it’s the highest priority for us internally and we have more than 10 people working on this. We apologize for this sudden inconvenience and hope to put better practices in place to avoid this in the future.”
It feels very disappointing that Mercury Bank could act in this way. But of course, it is also important to understand that it has to comply with regulatory ordinances in the United States. But typically, you give notices and provide the startups the opportunities to clear the air before you pause or restrict the accounts.
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Later this month or early next month, our neobank which is a full-fledged bank will launch in the United States. We have developed a novel playbook to support immigrants and foreign companies which majorly operate outside the United States. The US regulators like the protocols we have built.
I want to assure everyone that your bank is coming. We’re confident that as you grow, people will not see it as unusual activities. Do not lose confidence, the American market remains open despite the setback from Mercury.
We have a better KYC/AML protocol to ensure that everyone plays by the rule and that we support your growth at scale. I hope to share the first day of our operations here once the regulators finish the regulated-mandated cybersecurity checks of our technologies.
We expect the experts to finish at any moment and we will be on the path to be included in the US banking production server. Something amazing is on the way to support African and global startups in the US banking system.
We’re Tekedia Capital, we’re funding innovators of the future including a Texas-based Digital Bank
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The first take home here is that the people we always run to don’t feel that we are good enough or have come of age.
Again, we have not built a great reputation, such that ‘unusual activities’ can be seen as ‘usual activities’, because our bad behaviours still follow us around.
While we celebrate building businesses and raising funds, our ethical and moral standards also deserve serious re-engineering, so that we can begin to change the narrative. The promises you make must be fulfilled, and contracts must be respected.
Do not blame the politicians or look towards them to lead the renaissance, the young people can absolutely lead on this, and the only way to do it is by constantly demonstrating that you are different. When a people are known for more of good things, the bad things will be muted.