Eyowo has partnered with Nigeria’s Providus Bank to resume offering its users the ability to conduct interbank transfers.
The financial technology company has also communicated an interest in forming partnerships with additional commercial banks; nonetheless, this calls into doubt the company’s objective of promoting financial inclusion.
Interbank transfer capabilities were reinstated on the Eyowo digital banking platform three weeks after the company suffered the loss of its license to operate as a microfinance bank (MFB). This was accomplished through collaboration with Providus Bank.
The business startup has had to rely on Providus for banking services since it was forced to give up its MFB licence; nevertheless, it will continue to make use of its PSSP licence in order to process payments for its customers.
This new information has forced Eyowo to rethink its plans for the company’s future, which may potentially involve forming partnerships with additional commercial banks like Providus; yet, doing so may make it more difficult for Eyowo to achieve its objective of providing financial inclusion.
Users of Eyowo can now open a bank account with Providus in addition to their existing Eyowo bank account, and the business is working to establish similar agreements with other financial institutions.
This was stated by the company in a tweet: “Our long-term vision is now to create a space where accounts from other banks can be connected, enabling a comprehensive financial life management within Eyowo.” Even though it all started with the loss of their MFB licence, a representative for Eyowo stated that this event has pushed them to speed up their intentions of creating Eyowo as a financial centre.
This development has caused them to expedite their preparations. “Having other banks plugged into our platform has been a part of our plan, as we want to help our users manage and grow their finances in one place.” Users of Eyowo will be able to gain access to analytics regarding their spending, as well as other information that might help them improve their financial situation and allow them to expand, as he explained.
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The condition Eyowo gives customers to operate a digital bank
Even though, thank goodness, consumers have recovered access to their accounts, this current collaboration with Providus Bank implies that in order for Eyowo customers to execute interbank transactions, they are required to have a BVN. One is required to have previously held an account at a conventional financial institution in order to be eligible for a BVN.
Eyowo divides its users’ accounts into four distinct tiers, each of which corresponds to a different level of know-your-customer (KYC) verification. Tier 0 is the lowest tier, Tier 1 is the next tier up, and Tier 3 is the highest tier.
It appears that the reason why the company has connected all of its Tier 2 and Tier 3 users to new Providus bank accounts is because these tiers match the KYC standards of traditional banks like Providus. Currently, the company has done this. Customers with a tier 1 account are unable to conduct interbank transfers at this time; however, according to a tweet posted by the company, they will be able to do so if they upgrade to tier 2 and authenticate their identification using their biometric verification number (BVN).
Reducing the unbanked population
This is in stark contrast to the situation a few weeks before, when anyone could open an account on Eyowo with nothing more than a phone number in order to receive and transfer money to any other Nigerian bank.
During the debut of the digital bank in 2019, former CEO Tomi Amao stated that the company’s goal was to lower the number of people in the country who did not have access to traditional banking services.
This was due to the fact that Eyowo’s banking services are accessible via any smart or feature phone by dialling the USSD code *4255#.
A few months later, the co-CEO of the company, Yomi Adedeji, tweeted the following: “We have created a bank [Eyowo] on a phone number that enables everyone to access financial services irrespective of who they are and what they have.” However, in order for individuals to use the digital bank, they will first need to have an existing bank account.
Eyowo is aware of the implications these developments will have for individuals who are unable to open bank accounts at conventional financial institutions. An Eyowo spokesman said, “Solving for the financially excluded is still a part of our plans at Eyowo.”
As time goes on, Eyowo plans to increase the number of people who can benefit from their services by expanding their reach beyond the barriers that already exist. However, given the circumstances, Eyowo needs to direct its attention towards catering to as many clients as possible who have placed their trust in the company. These new innovations are truly an advancement for many of the clients of Eyowo, and every other aspect of Eyowo that they adore is still available.
According to what he reported, Eyowo’s primary focus at the moment is on being a converging point for a large number of commercial banks by utilizing its Payment and Switching Service Provider (PSSP) license. “We are also going to quickly become a hub for our users to get real-time financial intelligence and insight as they transact so they make better financial choices,” he said as he came to the conclusion.
