CBN Orders Banks and Fintechs to Disclose Beneficial Owners, Localise Payment Data

The Central Bank of Nigeria (CBN) has introduced sweeping new regulations aimed at increasing transparency, reducing market concentration, and strengthening oversight within the country’s rapidly expanding digital payments industry.

In a circular dated June 15, 2026, and signed by the Director of the Payments System Supervision Department, Dr. Rakiya Yusuf, the apex bank directed banks, fintech companies, and other licensed payment service providers to disclose their Ultimate Beneficial Owners (UBOs), localise payment transaction data, and comply with newly established market share limits.

The directive applies to Deposit Money Banks (DMBs), Microfinance Banks, Mobile Money Operators, switching companies, Payment Terminal Service Providers, Payment Solution Service Providers, Super Agents, and other licensed participants in Nigeria’s payment ecosystem.

The move comes as electronic payments continue to grow rapidly across the country, with a handful of operators gaining significant influence across key segments of the digital finance market. While this growth has accelerated financial inclusion and innovation, the CBN said it has also raised concerns about market dominance, ownership transparency, operational dependencies, and the management of critical payment data.

According to the regulator, the new framework is designed to create a more transparent, competitive, and resilient payments ecosystem while safeguarding the stability of Nigeria’s financial system.

A major aspect of the new policy is the requirement for financial institutions and payment service providers to disclose the Ultimate Beneficial Ownership of significant shareholders. Institutions must also maintain accurate and updated records of beneficial ownership and make them available to the CBN whenever requested.

The apex bank noted that the directive aligns with existing Anti-Money Laundering (AML), Combating the Financing of Terrorism (CFT), and Counter-Proliferation Financing regulations. By improving transparency around ownership structures, the measure is expected to strengthen regulatory oversight and reduce the risk of hidden control within the financial system.

In another significant development, the CBN has mandated that all payment transaction data generated within Nigeria must be stored and managed locally. Financial institutions and payment operators have until January 1, 2027, to fully comply with the data localisation requirement.

The policy is expected to enhance data security, improve regulatory access to payment information, and reinforce compliance with Nigeria’s data protection laws.

To address concerns about market concentration, the central bank also introduced new market structure rules that limit the extent to which a single institution can dominate multiple segments of the payments industry.

Under the framework, any licensed financial institution controlling more than 25 percent of the market share in consumer issuing activities over a rolling 12-month period will not be allowed to hold more than 15 percent market share in merchant acquiring activities during the same period.

Likewise, institutions with more than 25 percent market share in merchant acquiring will be restricted from controlling more than 15 percent of the consumer issuing market. The restrictions apply not only to direct operations but also to related entities within the same corporate group, ensuring that organisations cannot circumvent the rules through affiliated companies.

The CBN said these measures are intended to reduce concentration risks, encourage fair competition, create opportunities for smaller players, and prevent excessive influence by dominant operators across the payments value chain.

To support implementation, all regulated institutions will be required to submit monthly market share reports using templates and timelines prescribed by the central bank. Affected operators have until December 31, 2026, to fully align their business structures with the new market share requirements.

Explaining the rationale behind the reforms, the CBN stated that it had observed significant structural changes within Nigeria’s payments ecosystem driven by rapid growth in electronic transactions and digital financial services.

While these developments have improved efficiency and expanded financial access, the regulator warned that they also present risks related to market concentration, systemic importance, operational dependence, ownership transparency, and the location of critical payment data.

The central bank said the framework is intended to strengthen governance standards, improve transparency through beneficial ownership disclosure, ensure payment data remains within Nigeria, and promote a fair and competitive market environment.

The latest intervention signals the CBN’s determination to ensure that the growth of Nigeria’s digital payments industry does not create vulnerabilities that could threaten financial stability. As the country’s fintech and payments sectors continue to expand, the new rules are expected to play a critical role in shaping a safer, more transparent, and more balanced financial ecosystem.