Opay, Moniepoint slammed N1 billion fine

The Central Bank of Nigeria (CBN) reportedly imposed a fine of N1bn each on Moniepoint and OPay in the second quarter of 2024, in continuation of its increased scrutiny of fintech startups.

The two companies took the brunt of the penalties. However, numerous other fintech companies were also impacted. Following a normal CBN audit of the fintech industry that found compliance problems, the penalties were imposed. Two people who are aware of the process said that banks and other financial firms that are governed by the CBN routinely undergo these regulatory checks.

The specifics of the fines imposed on at least four additional fintech companies are still undisclosed. Fines have become a more important tool for the CBN to ensure regulatory compliance. Nigerian banks paid penalties totalling ₦678 million in 2023.

The Securities and Exchange Commission (SEC) and the central bank fined ten commercial banks, including Zenith and GTBank, ₦15 billion in October 2024 for a variety of violations during the first half of the year. The CBN had little influence over Nigeria’s quickly expanding fintech industry until recently.

Fintechs like OPay and Moniepoint, which currently serve millions of consumers, have grown rapidly, though, and this has drawn more attention. For example, OPay claims to have about 40 million customers, while Moniepoint, which handled 5.2 billion transactions in 2023, does not reveal precise client figures but is just as big. As the power of these fintech behemoths has increased, so too have worries about their regulatory environments.

One major problem is that a lot of fintech companies, like OPay and Moniepoint, continue to function under licenses from microfinance banks. Initially designed to assist micro, small, and medium-sized businesses, these licenses have enabled the firms to grow quickly and provide services to millions of clients. But, according to one source, that growth has also raised concerns that the current licensing system is insufficient to adequately protect consumers.

The CBN has voiced concerns regarding the fintechs’ adherence to Know Your Customer (KYC) procedures in addition to licensing. The central bank banned many fintech companies, including Kuda Bank and Palmpay, from onboarding new customers for two months in April 2024 due to their failure to comply with KYC regulations.

Fintechs were pushed to improve their compliance measures and restructure their onboarding processes as a result of the prohibition. Regarding any aspect of this tale, Moniepoint declined to comment

According to Opay: “We categorically refute the claims that OPay Digital Services was fined by the Central Bank of Nigeria to the tune of ₦1 billion for regulatory infractions. These claims are entirely false.”

However, a request for comment was not immediately answered by the Central Bank of Nigeria, BrandSpur banking and finance news reports.