CBN curbs payments dominance with new market share limits

… ordered banks, others to disclose the ultimate beneficiary ownership of shareholders

… Gives December 31, 2026 for full compliance

The Central Bank of Nigeria (CBN) has introduced new market share restrictions for payment operators in a move aimed at preventing excessive concentration in the country’s fast-growing digital payments industry and reducing systemic risks posed by dominant players.

In a circular signed by Rakiya Yusuf, director, Payments System Supervision Department, issued on Monday to banks, mobile money operators, switching companies, payment solution providers and other licensed operators, the apex bank said the measures were designed to address concerns over market concentration, operational dependence and systemic importance as electronic payments continue to expand rapidly across the economy.

The new framework prevents any financial institution that controls more than 25 percent of Nigeria’s card issuing market from holding more than 15 percent of the merchant acquiring market within the same rolling 12-month period.

Likewise, institutions that account for more than 25 percent of merchant acquiring activities will be restricted to a maximum of 15 percent market share in card issuing.

The CBN said 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 boosted innovation, efficiency and financial inclusion, the regulator said they had also created concerns around market concentration and operational dependence.

“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 Central Bank said.

The regulator added that the measures are intended to “safeguard the integrity of the Nigerian payments system” while ensuring stronger oversight of institutions considered critical to the financial system.

The move comes as digital payments volumes continue to surge in Nigeria, with fintech firms, banks and payment service providers competing aggressively for market share across card issuing, merchant acquiring, mobile payments and other electronic channels.

Under the new rules, all regulated entities will be required to submit monthly market share returns based on templates and timelines prescribed by the Central Bank.

Affected institutions have until December 31, 2026 to achieve full compliance with the market structure requirements.

Beyond the market share restrictions, the CBN also introduced tougher transparency requirements by directing all Deposit Money Banks, Payment Service Providers and other financial institutions with digital payments operations to disclose the Ultimate Beneficial Ownership (UBO) of significant shareholders.

Institutions are required to maintain accurate and up-to-date beneficial ownership records and make them available to the regulator upon request in line with existing anti-money laundering and counter-terrorism financing regulations.

The circular also strengthens Nigeria’s data localisation policy by mandating that payment transaction data generated within the country be stored and managed domestically.

“All Financial Institutions and participants facilitating payments within Nigeria shall ensure that payments transaction data generated within Nigeria are stored and managed in Nigeria,” the CBN said.

The data localisation requirement will become effective on January 1, 2027. The Central Bank said it would monitor compliance and impose supervisory sanctions where necessary in accordance with applicable laws, regulations and guidelines.