By Onu Okorie

The Central Bank of Nigeria CBN has introduced sweeping market structure rules designed to prevent any single institution from dominating multiple segments of the country’s fast-growing digital payments ecosystem, in what analysts are describing as one of the most significant regulatory interventions in the sector in recent memory.

Under the new framework, any licensed financial institution controlling more than 25 percent of market share in consumer issuing activities over a rolling 12-month period will be barred from holding more than 15 percent market share in merchant acquiring during the same period. The restriction works in both directions — institutions commanding more than 25 percent in merchant acquiring will equally be prohibited from holding more than 15 percent in consumer issuing.

Critically, the limits will apply whether activities are carried out directly by an institution or through related entities within the same corporate group, closing off a potential loophole that could have allowed dominant players to spread influence through subsidiaries.

The measures are contained in a circular dated June 15, 2026, signed by Dr. Rakiya Yusuf, Director of CBN’s Payments System Supervision Department, and 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.

The apex bank said the rules were designed to reduce concentration risks, foster competition, create room for smaller operators, and curb the systemic risks that arise when a handful of players exercise outsized influence across the payments value chain.

To enforce the new structure, CBN directed all regulated entities to submit monthly market share returns using prescribed reporting templates, with affected institutions given until December 31, 2026 to bring their operations into full compliance.

The market share rules, however, form only part of a broader regulatory overhaul. The circular also mandates all banks, fintechs, and payment service providers to disclose their Ultimate Beneficial Owners, requiring institutions to maintain accurate, up-to-date ownership records and make them available to the regulator on demand. CBN said the directive aligns with existing Anti-Money Laundering and Counter-Terrorism Financing regulations and is intended to strengthen transparency around ownership structures across the financial system.

In addition, the CBN introduced a mandatory data localisation policy, requiring that all payments transaction data generated within Nigeria be stored and managed on Nigerian soil. Financial institutions have until January 1, 2027 to achieve full compliance with that requirement — a move the regulator said would deepen oversight of payment transactions, bolster data security, and reinforce Nigeria’s data protection framework.

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 acknowledging that this growth had supported innovation, efficiency, and financial inclusion, the regulator said it had also raised serious concerns about market concentration, operational dependence, ownership transparency, and the location of critical payments data.

The apex bank stressed it would closely monitor implementation and deploy supervisory measures against institutions that fail to comply, signalling that the era of unchecked expansion by dominant payment players in Nigeria may be drawing to a close.