Fintech start-up, Flutterwave reveals why 86FB accounts were suspended

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Nigeria’s fintech company, Flutterwave, has dismissed a claim by 86FB, a gambling platform offering investment services, that it withheld funds belonging to Nigerians who invested in its promotion offerings.

A few days after 86FB was labelled a ponzi scheme, the sports betting platform released a statement on Friday and accused Flutterwave of colluding with the police to freeze its account, thereby making it impossible to pay investors.

Ripples Nigeria had reported on Tuesday that cash belonging to Nigerians who invested in 86FB’s offerings had been trapped as the online gambling firm halted payment to investors.

86FB directed affected Nigerians to demand their money from Flutterwave, claiming that the start-up planned to take over their money.

However, in its response to Ripples Nigeria inquiry on Sunday, Flutterwave said it was not in possession of 86FB’s customers’ funds.

The company said:

“We are aware of reports by a platform called 86FB/86Z claiming that Flutterwave has been withholding their funds. Flutterwave is not a bank; we are a payment processor and do not hold customers’ funds including those belonging to customers of 86FB/86Z. All transactions passed through the Flutterwave payment platform are treated and settled in line with regulatory requirements.”

The fintech start-up revealed that following the suspension of 86FB accounts, all funds due to the merchants were settled.

“We also settled all funds due to these merchants. No funds currently due to the merchants are with Flutterwave,” it added.

It directed 86FB customers to approach the investment company for payment issues.

Why Flutterwave suspended 86FB merchants’ accounts?

Ripples Nigeria gathered that merchants processing transactions for 86FB were transacting a business different from the service the sport betting firm registered to operate on Flutterwave payment channel. This is a breach of Flutterwave’s terms of service as well as that of regulatory requirements. The disparity was discovered during a Know-Your-Customer routine check by the payment processor, which mandated termination of the merchants operation.

A recent exercise revealed that some merchants were passing transactions on behalf of 86FB/86Z—a business not registered or approved by Flutterwave.

Where transactions are done contrary to the registered nature of a business, we are required to take appropriate actions up to and including termination.

For example, if a merchant is registered to sell tomatoes and without approvals, starts selling cars, the merchant is in breach of our terms of service and regulatory requirements.

“During our investigation, we identified direct merchants of Flutterwave who were processing transactions for 86FB/86Z without our approval or authorization to do so on the Flutterwave platform. As a result, we notified the merchants to cease processing and suspended their use of the Flutterwave platform,”

– the Fintech start-up stated.

Source: ripplesnigeria.com