CBN orders fintechs, banks to localise payment data, caps market dominance

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CBN

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•Mandates beneficial ownership disclosure

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•Sets 25% threshold, 15% cross-market cap

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•Compliance deadline set for Dec. 31, 2026

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By Babajide Komolafe

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The Central Bank of Nigeria, CBN, has directed banks, fintechs and other operators in the payments ecosystem to store all payment transaction data generated in Nigeria within the country, while also introducing measures to curb excessive market dominance in the industry.

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The apex bank disclosed this in a circular dated June 15, 2026, titled, “Introduction of Market Structure Requirements, Data Localisation, Ultimate Beneficial Ownership Disclosure, and Systemic Oversight Measures in the Nigeria Payments System.”

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According to the CBN, “all financial institutions and participants facilitating payments within Nigeria shall ensure that payments transaction data generated within Nigeria are stored and managed in Nigeria in accordance with data protection laws and regulations applicable in Nigeria.”

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The Bank added that “all affected financial institutions shall fully comply with this requirement effective January 1, 2027.”

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On ownership transparency, the CBN said: “All Deposit Money Banks, Payment Service Providers and other financial institutions with digital payments footprints shall disclose the Ultimate Beneficial Ownership (UBO) of significant shareholders in accordance with applicable extant laws and regulations, including Anti-Money Laundering, Combating the Financing of Terrorism and Counter Proliferation Financing regulations.”

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The apex bank further directed that institutions “shall maintain accurate and up-to-date UBO records and make such information available to the CBN upon request.”

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Explaining the rationale for the new measures, the CBN stated: “The Nigerian payments ecosystem has witnessed significant structural developments 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.”

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It noted, however, that “these developments have also raised concerns relating to market concentration, operational dependence, systemic importance, transparency of ownership structures, and the localisation of critical payment data.”

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To address these concerns, the Bank introduced market structure requirements under which “any licensed financial institution engaged in card issuing activities that holds more than 25 per cent market share in card issuing shall not hold more than 15 per cent market share in merchant acquiring activities during the same period.”

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Similarly, it stated that “any licensed financial institution engaged in merchant acquiring activities that holds more than 25 per cent market share in merchant acquiring shall not hold more than 15 per cent market share in card issuing activities.”

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The CBN directed all regulated entities to submit monthly market share returns and stated that “all affected financial institutions are required to take necessary measures to achieve full compliance not later than December 31, 2026.”

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