Eyowo has restored interbank transfers for its users through a partnership with Providus bank. The fintech has also expressed interest in partnering with more commercial banks but this questions its goal of financial inclusion.

Three weeks after the digital bank Eyowo lost its microfinance  bank (MFB) licence, it restored interbank transfer on its platform through a partnership with Providus Bank. Due to the loss of its MFB licence, the startup now relies on Providus for banking services while it will continue to leverage its PSSP licence to process payment for its users. This development has redefined Eyowo’s vision for its future which may now entail partnering with more commercial banks like Providus, but that may weigh heavily on Eyowo’s goal of financial inclusion.

Image source: TechCabal/Faith Omoniyi

Eyowo users now have a Providus bank account in addition to their Eyowo bank account, and the startup is gunning to enable similar partnerships with other banks.  In a tweet, the company said, “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.”  Speaking to TechCabal, an Eyowo spokesperson said that even though it all started out with the loss of their MFB license, this development has caused them to accelerate their plans of making  Eyowo a financial hub. “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. This way, Eyowo users can have access to analytics of their spending, and other information that can improve their finances and enable them to grow,” he said on a call with TechCabal.

Now you need a bank to use a digital bank

Even though, thankfully, customers have regained access to their funds, this current partnership with Providus Bank means that Eyowo customers must have a BVN to make interbank transfers. To have a BVN one needs to have already had an account in a traditional bank. 

Eyowo categorises its accounts into four tiers based on levels of customer identification (KYC). These tiers are referred to as Tier 0, Tier 1, Tier 2, and Tier 3. Currently, the company has connected all its Tier 2 and Tier 3 users to new Providus bank accounts, and it seems to be because these tiers meet the  KYC requirements of traditional banks like Providus. Tier 1 customers currently can’t perform interbank transfers but according to the company’s tweet, they will be able to once they upgrade to tier 2 by verifying their ID with their biometric verification number (BVN). 

This is a contrast to weeks ago when with just a phone number, anyone could create an account on Eyowo to receive and transfer money to any other Nigerian bank. When the digital bank launched in 2019, former CEO, Tomi Amao, said the company was aiming to reduce the population of the unbanked in the country as Eyowo’s banking services is accessible via any smart or feature phone through a USSD code: *4255#. Months later, co-CEO Yomi Adedeji tweeted, “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.” But with these changes, people need to have a bank to use the digital bank.

Eyowo understands what these changes mean to people who are unable to own accounts in traditional banks. Speaking to TechCabal, a spokesperson said, “Solving for the financially excluded is still a part of our plans at Eyowo. As time goes on we will extend the reach of our services beyond current obstacles to as many as we can. However, the circumstances require that we focus on serving as many customers who have trusted us now. Every other thing that they love about Eyowo still exists, and these new developments are actually progress for many of our customers. ”

He told TechCabal that right now, Eyowo is focused on using its Payment and Switching Service Provider (PSSP) license to become a converging point for many commercial banks. “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 concluded.

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