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Mercury Bank has restricted several accounts linked to African tech startups. The San Francisco based digital bank for tech start-ups, this week, said it has detected “unusual activity” with accounts of the affected start-ups.
Mercury Bank focuses on helping small tech companies manage their cash flow.
“We found out yesterday that our partner bank noticed unusual activity and asked us to lock and investigate a large set of accounts with linked activity. We are working through our due diligence on all those accounts and will be in touch with you individually with questions if we have any on your account or activity,” said CEO of Mercury Bank, Immad Akhund, in an email to its clients over the restrictions.
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Many African entrepreneurs and tech startups only realised their accounts had been blocked after the bank effected the restriction. There was no official notice or email from the bank, many of the affected account holders alleged via tweets.
“This is not a good look. I have a list of over 20+ African start-ups whose bank accounts were mass-blocked at around the same time by @BankMercury yesterday. I love Mercury a lot but they can’t just do this to an entire continent. It is not right and we need to all speak up,” said Founder of ScaleMyHustle and Vazi Legal, Modupe Odele, through series of tweets.
Techprenuer, Co-founder of Andela and the former managing director of Flutterwave, Iyinoluwa Samuel Aboyeji also tweeted: “I hope the general restrictions placed on African start-ups by @BankMercury reminds everyone that there is no alternative to building our own. Let’s build a Nigerian International Finance Centre and buy offshore bank licenses so we can bank our $$.”
The Nigerian government is already looking at the direction prescribed by Aboyeji. The governor of Central Bank of Nigeria (CBN), Godwin Emefiele last November announced plans to establish an international financial center at the Eko Atlantic city, Lagos to serve as financial hub for investors.
Mercury Bank holds over $4 billion in customer deposits for its more than 40,000 clients spread across over 200 countries.
Some insiders think the bank’s restriction may be part of the measures to reduce its exposure to “high risk” regions such as Africa as the Russia, Ukraine conflict heightens risks associated with trans-border operations in ‘highly vulnerable regions”.
