CBN Requires Banks and Fintechs to Reveal Beneficial Owners and Localize Payment Data by 2027

• Moves to curb market dominance, concentration risk in payments ecosystem

The Central Bank of Nigeria (CBN) has instructed banks, fintechs and other payment service providers to disclose their ultimate beneficial owners, localise payments transaction data, and adhere to new market share limits designed to reduce concentration risk.

These sweeping regulatory measures were issued in a circular dated 15 June 2026 and signed by the CBN’s Director of the Payments System Supervision Department, Dr Rakiya Yusuf.

The intervention represents one of the most significant actions by the CBN in the payments sector in recent years, aiming to reshape Nigeria’s rapidly expanding 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 the swift growth of electronic payments and the increasing dominance of a few players in key market segments.

According to the CBN, while digital financial services have spurred innovation, efficiency and financial inclusion, they have also raised concerns about market concentration, systemic importance, operational dependence, ownership transparency and the location of critical payments data.

The apex banking regulator said the new framework seeks to improve transparency, strengthen oversight and foster a more competitive and resilient payments ecosystem.

The framework requires 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.

CBN also directed affected institutions to maintain accurate and up‑to‑date records of beneficial ownership and to provide such information to the regulator whenever requested.

The bank explained that the directive aligns with existing Anti‑Money Laundering, Combating the Financing of Terrorism and Counter‑Proliferation Financing regulations and is expected to enhance transparency around ownership structures in the financial system.

Beyond ownership disclosure, the apex bank 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 1 January 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 percent of market share in consumer issuing over a rolling 12‑month period will be prohibited from holding more than 15 percent market share in merchant acquiring during the same period.

Similarly, institutions with more than 25 percent market share in merchant acquiring activities will not be permitted to hold more than 15 percent 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 target 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 given until 31 December 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.”