The Central Bank of Nigeria (CBN) has directed banks, fintech companies and other payment service providers to disclose their ultimate beneficial owners, as part of sweeping reforms aimed at strengthening transparency and competition in the country’s rapidly expanding digital payments sector.
The directive was contained in a circular signed by the Director of the Payments System Supervision Department, Dr Rakiya Yusuf, and sent to Deposit Money Banks, Microfinance Banks, Mobile Money Operators and other licensed payment operators.
The new framework also requires all payment transaction data generated in Nigeria to be stored and managed within the country from next year, while introducing market share limits designed to prevent excessive dominance by individual operators.
The CBN said the measures were necessary because of significant changes within the payments ecosystem, including the rapid growth of electronic transactions and the emergence of operators with substantial influence across key segments of the market.
“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,” the regulator said.
Under the new rules, all financial institutions involved in digital payment services must disclose the Ultimate Beneficial Ownership (UBO) of significant shareholders and maintain updated records that can be made available to regulators on request.
The apex bank said the requirement aligns with existing anti-money laundering and counter-terrorism financing regulations and is intended to improve transparency within the financial system.
In a move likely to have far-reaching implications for the fintech industry, the CBN also mandated that all payment transaction data generated within Nigeria must be localised and stored domestically.
According to the regulator, the policy will strengthen oversight, improve data security and support compliance with Nigeria’s data protection framework.
The circular further introduces restrictions aimed at reducing concentration risk within the payments industry.
Under the framework, any institution controlling more than 25% of the consumer issuing market over a rolling 12-month period will be barred from holding more than 15% of the merchant acquiring market during the same period.
Likewise, institutions with more than 25% market share in merchant acquiring will not be allowed to control more than 15% of the consumer issuing segment.
The restrictions will also apply to related entities operating within the same corporate group.
The CBN said the safeguards are designed to encourage competition, create opportunities for smaller operators and reduce systemic risks that could arise from excessive market concentration.
To support implementation, regulated entities will be required to submit monthly market share reports using prescribed templates and timelines.
Affected institutions have until the end of this year to fully comply with the new market structure requirements.
“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 bank said.
The regulator added that it would closely monitor compliance and apply supervisory measures where necessary.
The latest intervention signals the CBN’s determination to strengthen governance, improve transparency and safeguard financial stability as Nigeria’s digital payments industry continues to grow at pace.
