In a move that will impact businesses across the globe, the American financial technology company, Mercury, has announced plans to terminate the accounts of companies based in several countries, including Nigeria, effective August 22, 2024.
The decision is part of the revised eligibility criteria for opening accounts, which the company recently updated. Mercury will cease serving companies whose founders hold passports from countries like Belarus, Cuba, Iran, North Korea, Syria, Ukraine, and Venezuela.
Affected customers have received emails notifying them of the upcoming account closures. Mercury expressed regret for any inconvenience caused and assured support during the transition period, stating that while the company supports U.S. companies founded by people across the globe, it currently cannot open accounts for founders living in the specified countries and regions.
Customers have been advised to take necessary actions before the August 22 deadline, after which access will be limited to viewing account documents. The company did not provide detailed reasons for these changes in eligibility criteria.
Oo Nwoye, a prominent voice in the Nigerian tech community, expressed concerns on social media about the potential impact on fintech startups in the country, stating, “Hopefully it doesn’t affect all those our Multi Currency startups.”
This is not the first time Mercury has taken action against African tech startups. In a previous incident in March 2022, the company faced scrutiny over its practices concerning foreign account openings through its partner, Choice Bank. The FDIC raised concerns about accounts being opened in countries deemed legally risky, prompting Mercury to shut down accounts of numerous African tech startups, including many from Nigeria.
At the time, Mercury did not provide clear explanations for its actions nor did it issue warnings to the affected startups until concerns were publicly raised within the African tech ecosystem. CEO Immad Akhund later clarified that the company was adhering to internal procedures in compliance with regulatory standards.
Mercury’s latest decision underscores the ongoing challenges faced by international startups navigating U.S. banking regulations, with the potential to impact businesses across diverse global regions.
