Mercury, a digital banking startup, has recently announced that it will no longer be providing services to customers in certain countries, including Ukraine.
Earlier this year, Mercury faced federal scrutiny due to its association with Choice Bank, a partner involved in allowing foreign companies to open accounts. The FDIC expressed concerns about Choice Bank’s involvement with risk-prone countries, such as North Korea, Iran, Libya, and Russia.
In response to this scrutiny, Mercury stated that it has improved its risk and compliance teams. As part of their commitment to compliance, they have updated their eligibility requirements and informed certain customers that they can no longer be supported due to their location or account activity.
Despite Ukraine being a country with a thriving startup community, it is now included in the list of restricted countries by Mercury. The company clarified that the policy change only affects founders living in Ukraine, not those living in the U.S. with a Ukrainian passport.
Mercury attributed the inclusion of Ukraine in the banned countries list to the complexity arising from U.S. sanctions programs affecting certain regions within Ukraine. They assured that they would reassess this policy in the future.
Mercury explains why it banned Ukraine
According to Mercury, the decision to ban Ukraine was due to the challenges of supporting the country under current U.S. sanctions programs. They noted that while Ukraine is not under comprehensive sanctions, sanctioned regions within the country pose operational difficulties for Mercury.
For Nigerian founders in the U.S., Mercury has also announced changes that impact their accounts. Nigerian founders reported similar experiences in having their accounts closed, despite being U.S.-based. This move is part of Mercury’s efforts to align with stricter compliance standards.
In response to African fintechs offering alternatives, affected customers are exploring other banking options. Founders and experts have advised caution when dealing with Mercury, citing past disruptions and uncertainties in their operations.
Additional reporting by Rebecca Szkutak.
