The Central Bank of Nigeria (CBN) has announced a major regulatory framework designed to limit market concentration in the country’s digital payments industry, a move that could significantly affect leading fintech companies and traditional banks.
Under the new CBN New Market Share Rules, financial institutions with a dominant position in one segment of the payments ecosystem will face restrictions on expanding their influence across other key areas of the market.
The policy is part of broader efforts by the apex bank to encourage fair competition, reduce systemic risks, and strengthen Nigeria’s cashless economy.
CBN Sets New Limits on Market Dominance
According to the new framework, any licensed financial institution that controls more than 25% of the consumer payments market will be restricted to a maximum of 15% market share in merchant-acquiring activities.
Similarly, companies with significant influence in merchant acquiring will be prevented from maintaining excessive control over consumer payment services.
Consumer payment services include products such as bank accounts, digital wallets, debit cards, and other payment instruments used by customers to make transactions.
Merchant acquiring covers payment infrastructure that enables businesses to receive payments, including PoS terminals, payment gateways, and merchant settlement systems.
The CBN stated:
“Any licenced financial institution engaged in merchant acquiring activities, whether individually or as part of a group of related entities, that holds more than twenty-five per cent (25%) market share in merchant acquiring activities within any rolling twelve-month period shall not hold more than fifteen per cent (15%) market share in consumer issuing activities during the same period.”
The new regulations are scheduled to take effect on December 31, 2026.
Fintech Firms and Banks Face New Regulatory Reality
The implementation of the CBN New Market Share Rules is expected to affect some of Nigeria’s biggest fintech operators, including OPay, Moniepoint, PalmPay, Paystack, and Flutterwave.
Over the last few years, these companies have expanded beyond payment processing and merchant services into broader banking and financial products.
Their aggressive growth strategies have intensified competition within the digital finance sector, prompting concerns about market concentration.
Recent developments have further highlighted this trend. Several fintech firms have pursued banking licences and acquisitions to deepen their presence in the financial services market, creating an increasingly competitive environment between fintech operators and traditional commercial banks.
The new regulations are also expected to impact large banks that maintain strong positions in both retail banking and merchant payment services, ensuring that no single institution gains overwhelming control across multiple segments of the payments ecosystem.
CBN Pushes for a More Competitive Payments Ecosystem
The apex bank explained that the policy was introduced to address growing concerns about operational dependence on a few dominant players and the potential risks such concentration could pose to Nigeria’s financial system.
To prevent companies from circumventing the regulations, the CBN clarified that related entities operating under common ownership or control will be assessed collectively when determining market share compliance.
As part of the compliance process, regulated institutions will be required to submit monthly market-share reports using templates approved by the central bank.
In addition, the regulator is introducing stricter disclosure requirements regarding beneficial ownership structures and encouraging financial institutions to host critical payment infrastructure on local cloud platforms.
The reforms form part of the CBN’s wider strategy to strengthen oversight of Nigeria’s digital payments industry, which has experienced remarkable growth in recent years.
Industry transaction volumes have continued to rise as more consumers and businesses embrace digital payment channels.
The CBN warned that institutions found violating the new regulations could face supervisory sanctions in accordance with existing laws, regulations, and regulatory guidelines.
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Analysts believe the CBN New Market Share Rules could reshape competition within the industry by creating a more level playing field, encouraging innovation, and reducing the risks associated with excessive market concentration.
As Nigeria’s digital economy continues to expand, the latest regulatory intervention signals the central bank’s commitment to ensuring that growth in the payments sector remains competitive, secure, and beneficial to consumers and businesses alike.
