CBN Tightens Grip Fintechs, Bank Orders Disclosure of Beneficial Owners and Local Data Storage

The Central Bank of Nigeria (CBN) has introduced sweeping new regulations for banks, fintech firms and other payment service providers, mandating the disclosure of ultimate beneficial owners, localisation of payment transaction data and compliance with market share limits aimed at preventing excessive industry dominance.

The directive, contained in a circular dated June 15, 2026, was signed by the Director of the Payments System Supervision Department, Dr. Rakiya Yusuf, and issued 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.

The regulatory intervention is regarded as one of the most significant reforms in Nigeria’s payments ecosystem in recent years, coming amid the rapid expansion of electronic payments and growing concentration of market power among a few dominant operators.

Under the new framework, all regulated financial institutions and payment service providers are required to disclose the Ultimate Beneficial Ownership (UBO) of significant shareholders and maintain accurate, up-to-date records that must be made available to the apex bank upon request.

The CBN said the measure aligns with existing Anti-Money Laundering, Counter-Terrorism Financing and Counter-Proliferation Financing regulations and is intended to strengthen transparency and accountability within the financial system.

Beyond ownership disclosure, the apex bank also introduced a mandatory data localisation policy requiring all payment transaction data generated in Nigeria to be stored and managed within the country.

According to the circular, all affected institutions must fully comply with the data localisation requirement by January 1, 2027.

The CBN said the move would enhance regulatory oversight, improve data security and strengthen compliance with Nigeria’s data protection framework.

In a further effort to reduce concentration risk, the central bank introduced market structure rules designed to prevent individual institutions from dominating multiple segments of the payments value chain.

Under the new guidelines, any institution controlling more than 25 per cent of the consumer issuing market over a rolling 12-month period will be prohibited from holding more than 15 per cent of the merchant acquiring market during the same period.

Likewise, operators with over 25 per cent market share in merchant acquiring activities will not be allowed to exceed 15 per cent market share in consumer issuing.

The restrictions, according to the CBN, will apply not only to direct operations but also to activities conducted through subsidiaries, affiliates and related entities within the same corporate group.

The apex bank explained that the measures are intended to foster competition, create opportunities for smaller operators and reduce systemic risks associated with excessive market concentration.

To ensure effective monitoring, all regulated entities have been directed to submit monthly market share returns using reporting templates prescribed by the regulator.

Affected institutions have until December 31, 2026, to align their operations with the new market structure requirements.

Explaining the rationale behind the policy, the CBN noted that the rapid growth of Nigeria’s digital financial services sector, while driving innovation, efficiency and financial inclusion, has also created concerns regarding market concentration, operational dependence, systemic importance and transparency of ownership structures.

“These developments have supported innovation, efficiency and financial inclusion, but have also raised concerns relating to market concentration, operational dependence, systemic importance, transparency of ownership structures and the localisation of critical payment data,” the bank stated.

The regulator said the framework is designed to promote a fair, competitive and resilient payments ecosystem while safeguarding the integrity of Nigeria’s financial system.

Industry analysts say the new regulations could significantly reshape the country’s fast-growing fintech landscape by increasing transparency, strengthening oversight and limiting the ability of dominant players to control multiple segments of the digital payments market.

The CBN has warned that compliance will be closely monitored and that supervisory actions will be taken against institutions that fail to adhere to the new requirements.

The latest directive underscores the apex bank’s determination to balance innovation and financial inclusion with stronger governance, competition and systemic stability in Nigeria’s evolving digital economy.