OPay Introduces KYC Requirements To Prevent Fraud

OPay, a Nigerian financial technology firm, has enforced KYC (Know Your Customer) requirements for its customers to counter and prevent fraud and impersonation, as stated at a press conference on Wednesday. KYC is a process by which banks obtain information about the identity and address of the customers.

In recent evaluations, OPay’s fundamental account verification process for tier 1 has come under scrutiny, revealing significant weaknesses. Multiple tests have exposed vulnerabilities, particularly in the facial identity system, raising concerns about the platform’s susceptibility to exploitation by malicious actors.

During one of the tests conducted, a user successfully signed up for the service using basic personal information, such as the name and birthday of a well-known celebrity. The concerning aspect is that OPay failed to conduct proper verification of the submitted details, such as a bank account or phone number, allowing the user to bypass crucial security checks.

Last year, the Central Bank of Nigeria issued a stern warning against such weak verification processes. The banking regulator tasked all financial services providers to implement stricter KYC processes and disable bank accounts or mobile money wallets that have not been verified with a BVN (Bank Verification Number) or an NIN (National Identity Number). These financial services providers are expected to comply before the deadline, which is in April 2024.

OPay has now initiated the enforcement of the Bank Verification Number (BVN) and National Identity Number (NIN) requirements for wallet opening. Customers whose accounts are not KYC compliant will also be blocked.

In light of this, OPay announced its partnership with Interswitch as an effort to curb these issues. With the Interswitch Payment Gateway (IPG), the partnership seeks to reduce transaction friction by offering consumers a safe and easy way to make payments.

According to Olayemi Precilia, Director of Cards Business, “When you log into your app, and you have a tier one account, and you don’t have your NIN, it will ask for your NIN. You cannot move forward without inputting that NIN. So, that is one of the things we’ve already done.”

Director of Partnerships at OPay, Ikponmwosa Kolawole Odiase, confirmed that the fintech will remove phony accounts from the system. He said, “The fraudsters are not sleeping, and we also are waking up to the challenge. It’s an industry challenge; unfortunately, so many fictitious accounts will definitely go.”

The fintech firm revealed plans to block customers’ accounts that do not meet KYC requirements beginning in March 2024.