Aidi — Alternative Banks for African Startups Amidst Mercury Bank Accounts Closure

Back in March 2023, Silicon Valley Bank, the second biggest US bank, shut down due to its inability to meet its long-term debts and financial obligations, thus, forcing many startup founders to move their monies to alternative banks like Mercury to keep their financial operations running smoothly, globally.

Unfortunately, Mercury Bank announced last week that by August 22, 2024, the accounts of users in 13 African countries will be closed, leaving these users in desperate need to find other alternatives.

Why did this happen? Investigations carried out on Mercury Bank revealed that the bank did not have a strict account opening and onboarding process, making it easy for some individuals to open accounts for illegal activities like money laundering. Thirteen African counties were flagged, including Nigeria, resulting in the bank’s decision to close all accounts owned by individuals in flagged countries if they do not reside in the US.

Without a doubt, this is tough news for many startups, especially those registered in Delaware, USA, because having accounts with trusted banks like Mercury gives leverage to founders when trying to get dollar funding from investors. Following these new developments, African startups will need alternatives for their financial operations globally. 

Below are some alternative banks, which provide similar services to Mercury:

1. Grey: Grey provides business owners with a global bank account through which they can receive, send, exchange, and manage multiple currencies in one account. Their exchange rates are very affordable and you can also get a virtual debit card for making international payments. Grey is backed by Aidi. 
2. Geegpay (by Raenest): Geegpay provides African professionals with a swift and fully operational solution to receive payments from overseas clients more efficiently, all while reducing unnecessary fees. With Geegpay, African founders can generate invoices and send them to their international clients, and receive or withdraw money into multi-currency accounts to make payments globally.
3. Leatherback: Leatherback is a fintech company that makes it easy for individuals and businesses to trade globally. Their multi-currency platform provides businesses with seamless cross-border transactions. 
4. Graph: Graph provides a platform that allows business owners to carry out cross-border transactions from any location using their multi-currency bank accounts and billing-supporting currencies like USD, CAD, Euro, Pounds, etc. Graph is backed by Techstars. They also create company dollar cards.
5. Wise: Wise is a platform that helps business owners manage their money in multi-currency accounts, and make international transactions cheap and seamless. With the Wise account, business owners can hold balances in over 50 currencies, and use their debit card to make purchases while abroad.
6. Verto: Verto is a fintech company based in the UK, that empowers businesses in Nigeria to make cross-border payments, oversee global funds, and even make forex transactions. Verto is backed by Y-Combinator and allows business owners to hold balances in up to 49 local currencies.
7. Cleva: Cleva is a Y-Combinator-backed startup that allows business owners to open US-based accounts and receive USD payments even as non-US residents. This is also a good option for founders looking to receive funding from international investors. Cleva allows account owners to convert their USD to local currencies whenever they want to make a local payout.

It seems that some African founders envisioned a time like this, where founders like themselves may need to rely on alternative banks to carry out cross-border transactions and receive international funding seamlessly. While Mercury's decision to close accounts might be disappointing, it shouldn’t stop you from achieving your business goals. Check out these alternative banks and choose the one that best suits your needs.