See why you cannot transfer money from Fidelity Bank to OPay, Moniepoint, and Palmpay

Fidelity Bank, one of Nigeria’s commercial banks, has reportedly imposed restrictions on customer fund transfers to neobanks, including Moniepoint, Kuda, OPay, and PalmPay, due to rising concerns over fraud and customer verification. Multiple sources with direct knowledge of the matter confirmed that these neobanks are no longer listed as approved financial institutions on the Fidelity Bank app. While Fidelity Bank informed customers that the restrictions were linked to an app upgrade, insiders and sources at the affected fintech companies have provided a different perspective, TechCabal reports.

The transfer restrictions began at least two weeks ago, driven by increasing concerns about fraud losses and customer verification issues. Although OPay denied being affected, customers reported otherwise. PalmPay was informed of an upgrade, while Moniepoint also confirmed the restriction. Fidelity Bank has declined to comment on the situation.

Nigerian banks and fintech companies have experienced significant losses due to cyberattacks and fraud this year. The issues revolve around due diligence and know-your-customer (KYC) processes, leading to restrictions from traditional banks. Fintech startups are now working to understand and address these KYC concerns. The restrictions have sparked questions about whether a bank can unilaterally restrict transfers to another bank, as current regulations do not explicitly address this issue.

It remains unclear whether Fidelity Bank sought consent from the Central Bank of Nigeria (CBN) before implementing the restrictions, but sources suggest that the bank likely acted independently.