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FinTechs belonging to this category provide identification services, which are required for most banking services.
Introduction
Attitude of the country towards identification services
The attitude of the country towards identification services appears to have improved over the past few years. Now in Nigeria, there has been a transition to a digital primary identity for all citizens and legal residents via by the National Identity Management Commission (“NIMC”) through the issuance of a National Identification Number. Since 2013, various identification service providers have emerged, providing services ranging from electronic KYC/AML, identity verification, user authentication services to fraud detection services.
Legal affairs
Obligations and requirements to provide identification services
The NIMC provides eligibility criteria to be able to provide identification/verification services in Nigeria. The criteria are as follows: (a) an application/expression of interest to provide the service. It is important to note that the applicant must be a Nigerian entity; (b) submission of relevant compliance certificates in accordance with the requirements of Regulation 4 of the Licensing of the Frontend Services of the NIMC Regulations, 2017. This regulation is available on the NIMC’s website.
The required documentation includes: copies of the applicant company’s CAC incorporation documentation, including the Memorandum & Articles of Association of the company, whose object clause stipulates the company’s capacity to carry on the business of providing verification services as stipulated in Regulation 4(a) of the above-mentioned Regulation; current FIRS Tax Clearance Certificate; ITF Certificate of Compliance, - Bureau of Public Procurement Registration; Pension Certificate; NSITF ECS Certificate; NITDA Certificate of registration; Company’s Data Protection Policy indicating purpose(s) for data processing and data retention policy amongst others.
Additional comments regarding the legal situation for identification services or what FinTech’s must be aware of in this business area
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Economic conditions
Market size for identification services and biggest companies in this business area
The Market size for identification services in Nigeria is relatively small as the sector is still emerging. There are about five (5) major players in this sector and each offers their unique identification solutions, through various technologies. Some of the biggest companies in this business of identification verification are VerifyMe Nigeria, SeamFix, Smile ID, Identitypass and YouVerify.
Additional comments regarding the economic situation for identification services or what FinTech’s must be aware of in this business area
N/A