Central Bank of Nigeria (CBN) has ordered banks, fintechs, and other payment service providers to disclose their ultimate beneficial owners, localise payments transaction data, and comply with new market share limits designed to curb concentration risk.
The far-reaching regulatory measures were contained in a circular dated June 15, 2026 and signed by CBN’s Director, Payments System Supervision Department, Dr. Rakiya Yusuf.
The regulatory intervention represents one of the most significant interventions by the CBN in the payments industry in recent times, aiming at restructuring the country’s fast-growing digital payments ecosystem.
The circular, addressed to Deposit Money Banks, Microfinance Banks, Mobile Money Operators, switching companies, Payment Terminal Service Providers, Payment Solution Service Providers, Super Agents, and other licensed operators, comes amid rapid expansion of electronic payments and increasing dominance of a few players across critical segments of the market.
According to CBN, while the growth of digital financial services has boosted innovation, efficiency and financial inclusion, it has also heightened concerns over market concentration, systemic importance, operational dependence, ownership transparency, and location of critical payments data.
The apex banking regulator said the new framework sought to improve transparency, strengthen oversight and promote a more competitive and resilient payments ecosystem.
The new framework requires all DMBs, payment service providers, and other financial institutions with digital payments operations to disclose the Ultimate Beneficial Ownership (UBO) of significant shareholders.
CBN also directed affected institutions to maintain accurate and up-to-date records of beneficial ownership and make such information available to the regulator whenever requested.
The bank explained that the directive aligned with existing Anti-Money Laundering, Combating the Financing of Terrorism and Counter-Proliferation Financing regulations and was expected to strengthen transparency around ownership structures in the financial system.
Beyond ownership disclosure, the apex bank also introduced a mandatory data localisation policy requiring all payments transaction data generated within Nigeria to be stored and managed within the country.
The circular stipulated that all financial institutions and participants facilitating payments in the country must ensure full compliance with the requirement by January 1, 2027.
The move is expected to deepen regulatory oversight of payment transactions, strengthen data security, and reinforce compliance with Nigeria’s data protection framework.
The central bank further introduced market structure rules aimed at preventing excessive dominance by individual institutions across key payment segments.
Under the new framework, any licensed financial institution engaged in consumer issuing activities that controls more than 25 per cent of market share in consumer issuing over a rolling 12-month period will be prohibited from holding more than 15 per cent market share in merchant acquiring during the same period.
Similarly, institutions with more than 25 per cent market share in merchant acquiring activities will not be permitted to hold more than 15 per cent market share in consumer issuing.
The restrictions will apply whether the activities are carried out directly by an institution or through related entities within the same corporate group, the central bank stated.
Essentially, the new provisions are targeted at reducing concentration risks and preventing dominant players from exercising excessive influence across multiple segments of the payments value chain.
The measures effectively introduce structural safeguards intended to foster competition, create room for smaller operators, and reduce the systemic risks associated with excessive market concentration.
To facilitate monitoring, CBN directed all regulated entities to submit monthly market share returns based on prescribed reporting templates and timelines.
Affected institutions were allowed until December 31, 2026 to fully align their operations with the new market structure requirements.
The apex bank said it would closely monitor implementation and enforce compliance through supervisory measures where necessary.
The latest intervention underscores CBN’s determination to strengthen governance standards within the payments ecosystem while ensuring that the rapid growth of digital financial services does not create vulnerabilities capable of threatening financial stability.
The central bank stressed that it had “Observed significant structural developments within the Nigerian Payments ecosystem, characterised by rapid growth in electronic payments, increasing adoption of digital financial services, and the emergence of operators with substantial market presence across key payment activities.
“While these developments have supported innovation, efficiency, and financial inclusion, they have also raised concerns relating to market concentration, operational dependence, systemic importance, transparency of ownership structures, and the localisation of critical payment data.
“Accordingly, the CBN hereby issues this circular to improve transparency through beneficial ownership disclosure, address concentration risk, promote a fair, competitive, and resilient payments ecosystem.
“The circular further aims to safeguard the integrity of the Nigerian payments system and ensure the localisation of payments transaction data within Nigeria.”
James Emejo and Nume Ekeghe
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