American financial technology company, Mercury has announced a decision to close the accounts of businesses located in specific countries, Nigeria inclusive. The decision which will be effective from August 22, 2024, stems from recent changes in the company’s account eligibility criteria.
In a list of prohibited countries on its website, Mercury lists 15 African countries, in a list of 37 countries that also lists Russia. The bank will no longer also serve companies whose founders have passports from the following countries: Belarus, Cuba, Iran, North Korea, Syria, Ukraine, and Venezuela.
Other African countries that will be prohibited from opening US accounts on Mercury include Burundi, Cameroon, the Central African Republic, the Republic of Congo, Congo, Liberia, Libya, Mali, Mozambique, Somalia, South Sudan, Sudan, and Zimbabwe.
In an email sent to affected customers, Mercury expressed regret for the inconvenience caused by the account closures. The company emphasised that the decision was not taken lightly and assured customers of support during the transition period.
It stated:
“We support U.S. companies founded by people across the globe as well as founders and venture capital firms. However, we currently can’t open accounts for founders living in the following countries and regions…”
Customers have been advised to take necessary steps before the August 22 deadline, after which access will be limited to viewing account documents.
Mercury did not provide further details on the reasons behind the changes in account eligibility criteria. A popular Nigerian tech voice, Oo Nwoye who posted about it on X, expressed hope that it does not affect the business model of many fintech startups in the country.
“Hopefully it doesn’t affect all those our Multi Currency startups”, he tweeted.
This is not the first time Mercury has shut out African tech startups
Founded in 2017, Mercury, today serves more than 100,000 businesses, many of which are startups, via its B2B practice. In March 2022, the neo-bank forayed into personal banking, a move which made it a “target” of federal scrutiny around its practice of allowing foreign companies to open accounts through one of its partners, Choice Bank.
According to a report by The Information, the FDIC was “concerned” that Choice “had opened Mercury accounts in legally risky countries.” Officials also reportedly chastised Choice for letting overseas Mercury customers “open thousands of accounts using questionable methods to prove they had a presence in the U.S.”
Following that, the company shut down accounts of hundreds of African tech startups, many of which are Nigerian-owned companies. According to a report, the fintech company did not give clear reasons for the decision then, nor did it send warning notices to the startups.
It was only after a few people in the African tech ecosystem publicly raised concerns on this, that Immad Akhund, CEO of Mercury, which then held over 4 billion in customer deposits for its 40,000+ businesses in over 200 countries, sent an email stating that the bank was acting in compliance with internal procedures.
And it is working to resolve the issue quickly, seeing as it has adversely affected its customers.
“We found out yesterday that our partner bank noticed the 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,” the email stated.
“We don’t have a definite date for when this will be completed, but we will provide an update as soon as we have one. We’re prioritising the review of your account with our bank partner. We do apologise for any inconvenience this may cause,” it said in another email.
The question for most analysts is: “What more should African founders expect?”
Read also: Nigerium: Inside NITDA’s plan to build Nigeria’s indigenous blockchain network
American financial technology company, Mercury has announced a decision to close the accounts of businesses located in specific countries, Nigeria inclusive. The decision which will be effective from August 22, 2024, stems from recent changes in the company’s account eligibility criteria.
In a list of prohibited countries on its website, Mercury lists 15 African countries, in a list of 37 countries that also lists Russia. The bank will no longer also serve companies whose founders have passports from the following countries: Belarus, Cuba, Iran, North Korea, Syria, Ukraine, and Venezuela.
Other African countries that will be prohibited from opening US accounts on Mercury include Burundi, Cameroon, the Central African Republic, the Republic of Congo, Congo, Liberia, Libya, Mali, Mozambique, Somalia, South Sudan, Sudan, and Zimbabwe.
In an email sent to affected customers, Mercury expressed regret for the inconvenience caused by the account closures. The company emphasised that the decision was not taken lightly and assured customers of support during the transition period.
It stated:
“We support U.S. companies founded by people across the globe as well as founders and venture capital firms. However, we currently can’t open accounts for founders living in the following countries and regions…”
Customers have been advised to take necessary steps before the August 22 deadline, after which access will be limited to viewing account documents.
Mercury did not provide further details on the reasons behind the changes in account eligibility criteria. A popular Nigerian tech voice, Oo Nwoye who posted about it on X, expressed hope that it does not affect the business model of many fintech startups in the country.
“Hopefully it doesn’t affect all those our Multi Currency startups”, he tweeted.
This is not the first time Mercury has shut out African tech startups
Founded in 2017, Mercury, today serves more than 100,000 businesses, many of which are startups, via its B2B practice. In March 2022, the neo-bank forayed into personal banking, a move which made it a “target” of federal scrutiny around its practice of allowing foreign companies to open accounts through one of its partners, Choice Bank.
According to a report by The Information, the FDIC was “concerned” that Choice “had opened Mercury accounts in legally risky countries.” Officials also reportedly chastised Choice for letting overseas Mercury customers “open thousands of accounts using questionable methods to prove they had a presence in the U.S.”
Following that, the company shut down accounts of hundreds of African tech startups, many of which are Nigerian-owned companies. According to a report, the fintech company did not give clear reasons for the decision then, nor did it send warning notices to the startups.
It was only after a few people in the African tech ecosystem publicly raised concerns on this, that Immad Akhund, CEO of Mercury, which then held over 4 billion in customer deposits for its 40,000+ businesses in over 200 countries, sent an email stating that the bank was acting in compliance with internal procedures.
And it is working to resolve the issue quickly, seeing as it has adversely affected its customers.
“We found out yesterday that our partner bank noticed the 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,” the email stated.
“We don’t have a definite date for when this will be completed, but we will provide an update as soon as we have one. We’re prioritising the review of your account with our bank partner. We do apologise for any inconvenience this may cause,” it said in another email.
The question for most analysts is: “What more should African founders expect?”
Read also: Nigerium: Inside NITDA’s plan to build Nigeria’s indigenous blockchain network
American financial technology company, Mercury has announced a decision to close the accounts of businesses located in specific…
American financial technology company, Mercury has announced a decision to close the accounts of businesses located in specific countries, Nigeria inclusive. The decision which will be effective from August 22, 2024, stems from recent changes in the company’s account eligibility criteria.
In a list of prohibited countries on its website, Mercury lists 15 African countries, in a list of 37 countries that also lists Russia. The bank will no longer also serve companies whose founders have passports from the following countries: Belarus, Cuba, Iran, North Korea, Syria, Ukraine, and Venezuela.
Other African countries that will be prohibited from opening US accounts on Mercury include Burundi, Cameroon, the Central African Republic, the Republic of Congo, Congo, Liberia, Libya, Mali, Mozambique, Somalia, South Sudan, Sudan, and Zimbabwe.
In an email sent to affected customers, Mercury expressed regret for the inconvenience caused by the account closures. The company emphasised that the decision was not taken lightly and assured customers of support during the transition period.
It stated:
“We support U.S. companies founded by people across the globe as well as founders and venture capital firms. However, we currently can’t open accounts for founders living in the following countries and regions…”
Customers have been advised to take necessary steps before the August 22 deadline, after which access will be limited to viewing account documents.
Mercury did not provide further details on the reasons behind the changes in account eligibility criteria. A popular Nigerian tech voice, Oo Nwoye who posted about it on X, expressed hope that it does not affect the business model of many fintech startups in the country.
“Hopefully it doesn’t affect all those our Multi Currency startups”, he tweeted.
This is not the first time Mercury has shut out African tech startups
Founded in 2017, Mercury, today serves more than 100,000 businesses, many of which are startups, via its B2B practice. In March 2022, the neo-bank forayed into personal banking, a move which made it a “target” of federal scrutiny around its practice of allowing foreign companies to open accounts through one of its partners, Choice Bank.
According to a report by The Information, the FDIC was “concerned” that Choice “had opened Mercury accounts in legally risky countries.” Officials also reportedly chastised Choice for letting overseas Mercury customers “open thousands of accounts using questionable methods to prove they had a presence in the U.S.”
Following that, the company shut down accounts of hundreds of African tech startups, many of which are Nigerian-owned companies. According to a report, the fintech company did not give clear reasons for the decision then, nor did it send warning notices to the startups.
It was only after a few people in the African tech ecosystem publicly raised concerns on this, that Immad Akhund, CEO of Mercury, which then held over 4 billion in customer deposits for its 40,000+ businesses in over 200 countries, sent an email stating that the bank was acting in compliance with internal procedures.
And it is working to resolve the issue quickly, seeing as it has adversely affected its customers.
“We found out yesterday that our partner bank noticed the 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,” the email stated.
“We don’t have a definite date for when this will be completed, but we will provide an update as soon as we have one. We’re prioritising the review of your account with our bank partner. We do apologise for any inconvenience this may cause,” it said in another email.
The question for most analysts is: “What more should African founders expect?”
Read also: Nigerium: Inside NITDA’s plan to build Nigeria’s indigenous blockchain network
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