Fidelity Bank Resumes Transfers to Neobanks After Temporary Block

Fidelity Bank Resumes Transfers to Neobanks After Temporary Block

Fidelity Bank, a leading financial institution in Nigeria, has officially restored customer transfers to prominent neobanks, including OPay, Palmpay, Kuda, and Moniepoint. The move comes several weeks after the bank initially blocked these transactions, citing concerns related to fraud and customer verification.

Sources within the neobanks have confirmed the reinstatement of transfer services. The banking interruption, which occurred two weeks ago, caused a stir after Fidelity Bank took action amid escalating worries regarding fraudulent activities and verification issues linked to these neobanks.

“We have been in talks with them [Fidelity], so we knew when they were going to restore us,” disclosed a source at one of the affected neobanks to TechCabal. The decision to restore services reportedly followed after the Nigeria Inter-Bank Settlement System (NIBSS) expressed dissatisfaction with Fidelity Bank’s choice to block transfers to these financial entities, according to a source close to the situation.

The absence of these neobanks from the list of approved financial institutions on the Fidelity Bank app was first noticed by several customers. Although OPay initially refuted being impacted by the restrictions, customer complaints persisted. Meanwhile, a source at Moniepoint confirmed the restriction, and Sofia Zab, Chief Marketing Officer at Palmpay, clarified that the removal was not due to any issues with Palmpay but rather because of a necessary system upgrade on Fidelity Bank’s end.

Neobanks have gained significant popularity in Nigeria, particularly following a policy-driven cash crunch, positioning them as a preferred payment option. Their almost instantaneous transaction speeds and lower fees have made them favorable among merchants and vendors, facilitating customer payments and contributing to the expansion of businesses. Fidelity Bank’s temporary block on transfers to these neobanks led to a loss in revenue from transaction fees.

The reinstatement of these services signals a resolution to the recent rift and aims to restore seamless financial operations for customers and businesses utilizing these neobanks within the Fidelity Bank ecosystem.