CBN Moves Against Payment Sector Dominance, Orders Banks, Fintechs to Reveal Owners

The Central Bank of Nigeria (CBN) has unveiled new regulatory measures targeting ownership transparency, data security and excessive concentration of power in the country’s rapidly expanding digital payments industry.

Under the new framework, banks, fintech companies and other licensed payment service providers must disclose their ultimate beneficial owners, localise transaction data generated in Nigeria and comply with new market share restrictions.

The directive was contained in a circular issued by the CBN and signed by the Director of Payments System Supervision Department, Dr. Rakiya Yusuf.

It was addressed to Deposit Money Banks, Microfinance Banks, Mobile Money Operators, switching companies, Payment Terminal Service Providers, Payment Solution Service Providers, Super Agents and other operators licensed by the apex bank.

The CBN said the reforms were introduced in response to significant structural changes in Nigeria’s payments ecosystem, driven by rapid growth in electronic transactions and increased adoption of digital financial services.

While acknowledging that digital payments have improved financial inclusion, innovation and efficiency, the regulator expressed concerns over market concentration, operational dependence on a few major players, ownership transparency and the location of critical financial data.

The apex bank said the new rules are aimed at creating a more competitive, transparent and resilient payments system.

Under the beneficial ownership disclosure requirement, regulated institutions must provide details of individuals or entities that ultimately own or control significant shares in their organisations.

The CBN also directed operators to maintain updated ownership records and provide such information to the regulator whenever required.

The bank explained that the measure aligns with existing frameworks on Anti-Money Laundering, Combating the Financing of Terrorism and counter-proliferation financing.

In another major policy shift, the CBN mandated all payment transaction data generated within Nigeria to be stored and managed locally.

The regulator gave affected institutions until January 1, 2027, to achieve full compliance with the data localisation requirement.

According to the CBN, the policy will strengthen oversight of payment activities, improve data protection and enhance Nigeria’s control over critical financial information.

The new guidelines also introduced restrictions aimed at preventing dominant operators from controlling multiple segments of the payments value chain.

The CBN stated that any institution with more than 25 per cent market share in consumer issuing activities over a 12-month period will not be allowed to exceed 15 per cent market share in merchant acquiring.

Similarly, operators controlling more than 25 per cent of the merchant acquiring market will be restricted from exceeding 15 per cent in consumer issuing.

The restrictions will apply to both direct operations and activities carried out through subsidiaries or related companies within the same corporate group.

The apex bank said the measures are designed to reduce concentration risks, encourage fair competition and provide opportunities for smaller operators to thrive.

To monitor compliance, all regulated entities have been directed to submit monthly market share reports based on templates provided by the CBN.

Institutions affected by the new market structure rules have until December 31, 2026, to adjust their operations accordingly.

The CBN said it would closely supervise implementation and apply enforcement measures against institutions that fail to comply.

The latest intervention marks a significant attempt by the apex bank to reshape Nigeria’s digital payments landscape by balancing rapid technological growth with stronger governance, transparency and financial stability.