• Latest
  • Trending
Mercury restricts some African Startups accounts

US digital bank, Mercury restricts African Startups accounts

March 6, 2022
Edtech startup The Invigilator raises $11 million to scale its AI platform

Edtech startup The Invigilator raises $11 million to scale its AI platform

September 6, 2025
iXAfrica receives RMB financing to fast-track 20 MW expansion in Nairobi

iXAfrica receives RMB financing to fast-track 20 MW expansion in Nairobi

September 6, 2025
OpenAI challenges LinkedIn with new AI-powered hiring platform

OpenAI challenges LinkedIn with new AI-powered hiring platform

September 6, 2025
Tanzanian fintech NALA takes its services to Kenya

Tanzanian fintech NALA takes its services to Kenya

September 6, 2025
Call of Duty movie: Paramount, Activision strike deal for live-action adaptation

Call of Duty movie: Paramount, Activision strike deal for live-action adaptation

September 5, 2025
Meta Brings Back Facebook Poke with Emojis and Streaks

Meta Brings Back Facebook Poke with Emojis and Streaks

September 5, 2025
Know why they’re calling: Truecaller launches AI-powered insights

Know why they’re calling: Truecaller launches AI-powered insights

September 5, 2025
Visa harnesses local partnerships to launch Visa Pay in DR Congo

Visa harnesses local partnerships to launch Visa Pay in DR Congo

September 5, 2025
Betika denies recent reports of security breach

Betika denies recent reports of security breach

September 5, 2025
10 things you can actually buy with crypto in Africa

10 things you can actually buy with crypto in Africa

September 5, 2025
Your one-stop tech hub! Get the latest updates on AI, cybersecurity, fintech, and emerging technologies.
  • Tech News
    • Africa Tech
    • Global Tech
    • Tech with Pelumy
    • Tech Careers
    • General News
    • How To
    • Reviews
  • Cryptocurrency
  • Fintech
  • Startups
  • Ai
No Result
View All Result
  • Tech News
    • Africa Tech
    • Global Tech
    • Tech with Pelumy
    • Tech Careers
    • General News
    • How To
    • Reviews
  • Cryptocurrency
  • Fintech
  • Startups
  • Ai
No Result
View All Result
Techpression
No Result
View All Result
Home Business

US digital bank, Mercury restricts African Startups accounts

Staff Writer by Staff Writer
March 6, 2022
149 1
0
Mercury restricts some African Startups accounts
465
SHARES
Share on FacebookShare on TwitterWhatsAppTelegram

The month of March started with panic for a number of African founders when US digital bank, Mercury, which describes itself as a bank for startups restricted the accounts of some African startups linked to it without prior notice and no justifiable explanation.

According to the sources, Mercury did not give any prior notice for this action, nor did it explain why the restriction was imposed in its first email to the affected startups.

Mercury email to the restricted customers. Source: https://mochievous.medium.com/

Who is Mercury?

Popular lawyer and entrepreneur Modupe ‘Moe’ Odele wrote on her medium page — “Mercury is not a bank but they provide banking services.”

Mercury describes itself as “a complete financial stack to build your company. Scale with FDIC-insured bank accounts, debit cards, and 3-click payment flows” and for the most part, they kept their promise she says.

RelatedPosts

No Content Available

“Mercury works with FDIC-insured banks, including Evolve Bank & Trust, Member FDIC, to store your deposits. The banking provider for your Mercury account can be found by going to mercury.com/legal while logged into your Mercury account.”

Why do so many African Startups rely on Mercury?

“This is not by choice” says Modupe ‘Moe’.

Many African startups are forced to use foreign bank accounts due to structural limitations around performing international transactions with their home-based banks.

Mercury, by its mission of allowing founders to open a U.S. bank account from anywhere in the world, became a quick favorite of non-US Founders globally trying to expand into the United States.

Read Also : Kenyan Youths can access seed funding from Zuhura Africa

Another reason is external pressure from investors, she added.

Sola Akindolu, Brass CEO made a tweet on this saying — “African startups are US companies because it’s the top way to raise money or access most things. Many investors will never touch a non-US company.”

Sola's tweet

According to Akindolu, being incorporated in the US makes it easier for African startups to raise money. And Mercury presents them a solution of opening a US bank account without actually being in the US.

Moe further explains that — The influx into the African ecosystem is expected to be between $4.3 billion and $5 billion this quarter. Furthermore, the bulk of the most active Venture Capitalists in Africa are not based on the continent. As a result, African startups tend to incorporate outside of the continent in order to gain better access to these investors.

Finally, and perhaps most critically, several influential early-stage investors require African firms to register as a Delaware C Corp as a condition of investment. As a result, the startup’s organizational structure is changed to a Delaware Holding Company, with the local operating entity becoming a subsidiary of the newly formed Delaware corporation.

This procedure is known as a flip, she says.

Which Companies Are Affected by The Restriction?

The number of companies involved with this restriction is unknown. But information gotten from a few sources disclosed that affected companies range from a dozen to 30 — including well-established YC-backed startups and newer upstarts.

Effect of the Restriction

So far all accounts affected cannot make any transfers from their account, can’t use their debit cards, and are not even allowed to log in to view their accounts. This also means that checks sent won’t clear and funds cannot enter into those accounts.

The financial operations of many companies run by African founders have simply been brought to a halt overnight.

Mercury, which holds over $4 billion in customer deposits for its 40,000+ businesses in over 200 countries, told some of these startups that their accounts had been flagged and placed under review by its compliance team after it noticed some “unusual activity,” but that it couldn’t provide any further details until the review was completed.

“We don’t have a definite date for when this will be completed, but we will provide an update as soon as we have one. We’re prioritizing the review of your account with our bank partner. We do apologize for any inconvenience this may cause,” it said in another email.

Reactions

Read Also : M-KOPA penetrating Nigeria and Ghana after clocking 2 million customers

Mercury’s decision to suspend these accounts without giving a reason has angered some founders and tech stakeholders, who have resorted to Twitter to vent their displeasure. Mercury’s restriction came at an inconvenient time – the end of the month — when key commitments like payroll and taxes should have been addressed; now, the founders claim, things will have to wait.

Mercury’s move, according to a handful of unnamed founders, says it could be tied to the ongoing conflicts between Russia and Ukraine, which has caused the company’s partner bank to evaluate its exposure to “high risk” regions like Africa. Mercury attempted to clarify in an email to one of the affected founders that their purpose was not for the founder and his company to “feel singled out or held to a different standard.”

It’s hard to think that isn’t the case, considering how startups from other regions don’t seem to have experienced a similar problem, judging by activity linked to the situation on Twitter.

D.Barry, a Twitter user, compared Mercury’s actions to the treatment of Africans by US fintech such as PayPal and Coinbase, which ban their accounts without providing adequate notice or cause.

A spokesperson of Mercury responded to comment requests from Techcrunch saying — “Mercury is aware that one of its backend banks has suspended the accounts of a number of the startup’s customers in Africa. And while the bank was acting in compliance with its internal procedures, the suspension has adversely affected some of its customers.”

“It’s a top priority for us to work with the bank to resolve this matter as quickly as possible. We’re reaching out to the customers impacted directly and apologize for the disruption this event has caused,” the spokesperson added.

Meanwhile, CEO Immad Akhund reached out via email to those affected saying —

Hi everyone,

I am the CEO of Mercury. Since many of you have emailed/messaged me directly I thought it would be best if I just reached out directly.

We found out yesterday that our partner bank noticed unusual activity and asked us to lock and investigate a large set of accounts with linked activity. We are working through our due diligence on all those accounts and will be in touch with you individually with questions if we have any on your account or activity.

Since it’s a reasonably large set of accounts it’s taking us some time to work through all of them but it’s the highest priority for us internally and we have more than 10 people working on this.

We apologize for this sudden inconvenience and hope to put better practices in place to avoid this in the future. We will be in touch directly as we make progress and feel free to email me on this email if you have to follow up questions.

Regards,

Immad

Tags: Mercury. African Startups
Staff Writer

Staff Writer

No Result
View All Result

Quick Links

  • Tech News
  • Cryptocurrency
  • Fintech
  • Startups
  • Business

Follow Us:

  • facebook
  • instagram
  • Twitter(X)
  • Linkedin
  • YouTube
  • About
  • Advertise
  • Privacy & Policy
  • Contact

© 2025 Techpression.com -Techpression Media Limited

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In

We are using cookies to give you the best experience on our website.

You can find out more about which cookies we are using or switch them off in .

No Result
View All Result
  • Home
  • Tech News
    • Africa Tech
    • Global Tech
    • Tech with Pelumy
    • Tech Careers
    • Reviews
    • How To
    • General News
  • Cryptocurrency
  • Business
  • Fintech
  • Startups
  • Featured
  • Ai
  • Tech TV

© 2025 Techpression.com -Techpression Media Limited

techpression.com
Powered by  GDPR Cookie Compliance
Privacy Overview

This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.

Strictly Necessary Cookies

Strictly Necessary Cookie should be enabled at all times so that we can save your preferences for cookie settings.

3rd Party Cookies

This website uses Google Analytics to collect anonymous information such as the number of visitors to the site, and the most popular pages.

Keeping this cookie enabled helps us to improve our website.