The Central Bank of Nigeria (CBN) has introduced new market-structure rules that could prevent any single financial institution from dominating both consumer and merchant payments.
In a circular issued on Monday, the regulator disclosed that any licenced financial institution that controls more than 25% of the consumer-issuing market will be restricted to a maximum of 15% market share in merchant-acquiring activities.
The rule comes as banks and fintechs expand beyond their traditional niches to serve both consumers and merchants. The regulator’s new framework is designed to prevent any single institution from becoming the dominant gateway for cashless transactions, reducing concentration and systemic risk in the payments ecosystem.
“Any licenced financial Institution engaged in merchant acquiring activities, whether individually or as part of group of related entities, that holds more than twenty-five percent (25%) market share in merchants acquiring activities within any rolling twelve-month period shall not hold more than fifteen percent (15%) market share in consumer issuing activities during the same period,” the CBN said in its circular.
Consumer issuing refers to services that enable consumers to make payments, including bank accounts, payment cards, digital wallets and other payment instruments. Merchant acquiring is the infrastructure that enables businesses to accept payments, including payment gateways, Point-of-Sale (PoS) services, and merchant settlement systems.
The rule, which takes effect on December 31, 2026, is designed to prevent excessive concentration in Nigeria’s rapidly expanding digital payments ecosystem, which processed ₦1.2 quadrillion ($884.78 billion) in 2025.
The move has significant implications for major fintech companies such as Paystack, Flutterwave, and Moniepoint, many of which have spent years building strong merchant-payment businesses and are increasingly expanding into customer-facing banking services. In January, Paystack acquired Ladder Microfinance Bank, and in April, Flutterwave secured an MFB licence after acquiring open banking startup Mono, as fintechs move to convert payment users into banking customers.
Traditional banks such as United Bank for Africa could also be affected if they seek to build substantial market share in merchant acquiring while retaining dominant positions in consumer banking.
The CBN said the new requirements were introduced in response to concerns around market concentration, operational dependence, and the emergence of operators with substantial market presence across key payment activities.
The restrictions will apply not only to individual companies but also to groups of related entities. Financial institutions cannot circumvent the rules by separating consumer and merchant businesses into different subsidiaries while retaining common ownership or control.
“All regulated entities shall submit monthly market share returns in accordance with prescribed templates and timelines,” the CBN said in the circular.
The market-share limits form part of a broader set of reforms targeting the payments industry. The CBN is also requiring banks and fintechs to disclose the ultimate beneficial owners of significant shareholdings and is pushing operators to use local cloud infrastructure as part of efforts to strengthen oversight and localise critical payments data.
The rules show a regulator in favour of a more fragmented market, where competition is maintained on both sides of the payments ecosystem.
“The CBN shall monitor compliance with the provisions of this circular and may, where necessary, impose supervisory sanctions in accordance with applicable laws, regulations, and guidelines,” the regulator added.