The Central Bank of Nigeria has issued a major regulatory overhaul, ordering fintechs and banks to disclose beneficial owners and unbundle market dominance.
The Central Bank of Nigeria (CBN) has stepped in with a major regulatory intervention aimed at restructuring the country’s fast-growing digital payments ecosystem. Moving to curb systemic vulnerabilities born from rapid, unmonitored expansion, the apex bank has issued a comprehensive directive targeting corporate transparency, data sovereignty, and anti-competitive market structures across all electronic payment operators.
The wide-ranging framework, outlined in a circular from the Payments System Supervision Department, applies immediately to Deposit Money Banks (DMBs), Mobile Money Operators (MMOs), switching companies, and fintech service providers. The central bank’s abrupt regulatory pivot is a direct response to growing concerns over market concentration, hidden corporate structures, and the foreign hosting of sensitive sovereign financial data.
At the core of the new guidelines is an aggressive push for transparency regarding corporate control. Under the new rules, all financial institutions with digital payment footprints must identify and formally disclose their Ultimate Beneficial Ownership (UBO) structures. This requires firms to map out and hand over records of any significant shareholders who exercise back-end control or hold major equity interests through nominee arrangements or proxy entities.
The CBN is aligning its supervisory framework directly with global Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) standards. Moving forward, digital payment firms are required to maintain up-to-date UBO data registries, making them instantly available for central bank inspection to eliminate illicit financial flows and trace corporate accountability.
Clamping Down on Market Dominance
Beyond corporate transparency, the apex bank is tackling the operational monopolies that high-growth fintech unicorns have built. The CBN noted that while the emergence of dominant super-apps has accelerated financial inclusion, it has also created severe concentration risks. If a single provider handling the bulk of retail payments suffers an infrastructure crash or liquidity run, it could instantly freeze trade for millions of citizens.
Any licensed entity or corporate group that controls more than 25% of the consumer card-issuing market over a rolling 12-month period is barred from holding more than a 15% market share in merchant processing during that same timeframe. Operators have been given a firm deadline of December 31, 2026, to restructure their business models, split their operations, or divest assets to comply with the new anti-monopoly landscape.
Mandating Sovereign Data Storage
The final pillar of the reform establishes an ironclad digital perimeter around national transactional data. The CBN has mandated a strict data localization policy, ordering all participants to store, manage, and process all payment transaction records generated within Nigeria on local infrastructure.
The policy, which must be fully implemented by January 1, 2027, is designed to enhance domestic data protection, protect national security, and ensure that local compliance auditors maintain direct oversight of the nation’s financial data rails. By forcing operators to move data back within domestic borders, Nigeria is taking clear steps to safeguard its digital economy against external systemic shocks.
