The Central Bank of Nigeria (CBN) has imposed new restrictions aimed at preventing any single financial institution from gaining excessive control over both consumer and merchant payment services. Effective December 31, 2026, any licenced institution holding more than 25% of the consumer-issuing market will be limited to a maximum of 15% share in merchant-acquiring activities, and vice versa. Consumer issuing includes services such as bank accounts, payment cards, and digital wallets, while merchant acquiring covers payment gateways, Point-of-Sale (PoS) systems, and merchant settlement infrastructure. The rule applies to both individual firms and groups of related entities, blocking attempts to bypass the cap through subsidiary structures under common ownership. The CBN issued the directive in a circular on Monday, citing concerns over market concentration, operational dependence, and the growing dominance of certain players across multiple payment functions. Monthly market share reports will be required from all regulated entities to ensure compliance. The move targets major fintechs like Paystack, Flutterwave, and Moniepoint, which have expanded from merchant services into consumer banking—Paystack acquired Ladder Microfinance Bank in January, and Flutterwave secured an MFB licence in April after buying Mono. Traditional banks such as United Bank for Africa may also be affected if they pursue large merchant-acquiring operations while maintaining dominant consumer banking positions. The payments ecosystem in Nigeria processed ₦1.2 quadrillion ($884.78 billion) in 2025, underscoring the scale at stake. Alongside the market-share limits, the CBN is mandating disclosure of ultimate beneficial owners for significant holdings and pushing firms to use local cloud infrastructure to keep critical data within the country. These measures are part of broader reforms to decentralise control, enhance competition, and strengthen regulatory oversight in the fast-growing digital payments sector.
The CBN's move to cap market shares signals a direct challenge to fintechs building end-to-end dominance by leveraging merchant networks to capture banking customers. Paystack and Flutterwave have already taken steps to enter consumer banking, suggesting the rules may arrive just as their strategies mature. By blocking ownership-based workarounds, the regulator is treating corporate structure as a compliance boundary, not a loophole. This could slow consolidation but may also push firms to restructure operations in ways that complicate service integration.
Editorial note: AI-assisted opinion, not established fact. Full disclaimer →
