Opay (a Nigerian financial technology company) has been known to adopt lax registration processes which has raised fraud concerns among certain people and authorities.
Opay which was founded by Chinese billionaire, Yahui Zhou in 2018 has become one of the top competitors in the fintech space and one of the largest mobile money services in Nigeria. A marketing strategy Opay utilizes is to provide bank accounts for everyone especially those without a bank account. In essence, they simplify the registration process for new users, removing strict requirements for verification of identity. This requirement they removed allows users to come on board but with very limited access to some features.
However, recently these lax standards have become a cause for alarm as financial fraud continues to increase in the country. Currently, Opay still allows new users to register without proper verification means like BVN which is compulsory for opening bank accounts in a fully registered bank in Nigeria.
Opay uses a tier-based account system for users, which implies that the more verification you do, the more features are accessible to you on your account. The tier ranges from 1 to 4.
Concerns have been raised against the tier 1 verification process as various tests show that new users are able to carry out a transaction within 60 seconds of registration. It should be noted that users are expected to carry out a real-time facial verification to confirm their identity on Opay. A KYC expert said, “Face verification is not solving for anything if it does not match the BVN details,” This KYC expert also suggested that OPay should require a user’s BVN before verifying their face.
In the Opay tier 1 account, users can deposit up to N300,000 and make transactions of up to N50,000. Although these limits are reasonable, the ability of a person to create multiple Opay accounts raises concerns. Multiple accounts will allow such users to transact even more and defraud people.
In December of 2023, the Central Bank of Nigeria (CBN) issued a warning against such weak verification processes. Companies in the fintech space were asked to implement stricter KYC (know-your-customer) processes and disable bank accounts or mobile money wallets that do not have a BVN or NIN associated with them. These Financial services platforms are to comply before April 2024 which is the deadline.
