It appears that Nigerian fintech companies may need to seek alternative means of identity verification as the Central Bank of Nigeria has reportedly banned fintech companies like Paystack, and other non-bank financial institutions from offering BVN validation services to their customers.
An e-mail sent by Paystack to its customers revealed that a new "regulatory directive" now prohibited them, along with other third-party partners rendering the service, and it will now be "temporarily unavailable".
The email sent on Thursday read: "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. In light of this news, we’re hereby informing you that the BVN Resolve service will be temporarily unavailable starting at midnight, today, April 8.”
The move has been decried by several analysts as an attempt to frustrate innovation in the country, as it comes at the same time with the SEC's clampdown on investment tech platforms.