By August 22, 2024, Mercury, a well-known banking partner for startups, promises to cancel users’ accounts in a number of nations, including thirteen African nations.

“Due to recent changes in how we determine account eligibility, we are no longer able to support accounts for businesses with associated addresses located in these countries,” the company said.

With the new prohibitions, African startups incorporated in Delaware cannot open Mercury accounts unless the founders live in the U.S.

The impacted nations in Africa:

• Burundi
• Cameroon
• Central African Republic (CAR)
• Democratic Republic of Congo (DRC)
• Congo
• Liberia
• Mali
• Mozambique
• Nigeria
• Somalia
• South Sudan
• Sudan

Mercury is a growth-stage US fintech company was founded in 2017 and offers financial services to companies all around the world. Although they are not your normal bank, they provide their services to clients by partnering with both banks directly and a combination of middlemen (BaaS).

Mercury was under government inspection earlier this year [2024] for its policy of allowing foreign corporations to create accounts through one of its partners, Choice Bank. Reports state that Mercury tightened its compliance and regulatory standards as a result of this. The fact that Choice “had opened Mercury accounts in legally risky countries” alarmed the regional banking authorities. Additionally, Choice was allegedly reprimanded by authorities for permitting foreign Mercury clients to “open thousands of accounts using questionable methods to prove they had a presence in the U.S.”

Countries on the Financial Action Task Force (FATF) Grey list such as Nigeria and Burundi are believed to be easy to target due to their lack of compliance with global standards for combating money laundering and terrorism financing.

This is also coming in the backdrop of greater scrutiny in the U.S. banking sector especially after the collapse of another startup banker, Silicon Valley Bank (SVB), in early 2023.

That said, Mercury’s services were crucial for African startups allowing them to operate with U.S. dollar accounts, crucial for attracting and handling foreign investment. Given that the company was already under criticism in Africa after it restricted the accounts of over a dozen tech startups in 2022, many people in the ecosystem are now looking to move to stable alternatives that provide the same services.

• Zimbabwe