Mercury Bank, a U.S.-based fintech firm known for its banking services for early-stage startups and tech founders, has recently restricted Nigerian founders from opening accounts on its platform. This decision, notably lacking a detailed explanation, has generated significant concern and speculation within the Nigerian entrepreneurial community.
The only official communication from Mercury states, “We currently can’t open accounts for founders living in the following countries and regions,” with Nigeria being one of the listed countries. This vague reasoning has led to widespread conjecture regarding the underlying causes of this restriction.
Speculation on the Reasons Behind the Decision
Industry analysts suggest that compliance concerns may have driven Mercury’s decision. Given the global emphasis on anti-money laundering (AML) standards and international banking regulations, it is plausible that Mercury is attempting to mitigate potential compliance risks. This theory aligns with previous instances where Mercury restricted accounts linked to African startups due to “unusual activity” flagged by their partner banks.
According to a report by Businessday NG, Mercury had previously shut down accounts of numerous African tech startups, many of which were Nigerian-owned, without clear reasons or prior warnings. In response to public concerns, Mercury’s CEO, Immad Akhund, stated that the bank was acting in compliance with internal procedures and working to resolve the issue quickly.
Impact on Nigerian Tech Founders
For Nigerian tech founders, this prohibition is a significant setback. Many rely on platforms like Mercury for seamless international transactions and venture capital funding. Nigeria, often referred to as the “Silicon Valley of Africa,” has become a major hub for tech innovation, attracting substantial international investment. Access to U.S. banking services is often a critical component for these startups to operate efficiently and attract global funding.
The restriction forces Nigerian startups to seek alternative, potentially less efficient, banking solutions. This shift could affect their operational efficiency and global competitiveness. The fintech community in Africa is now advocating for more robust, locally-built financial solutions to reduce dependence on foreign institutions that can impose such restrictions abruptly.
