CBN orders banks, fintechs to disclose owners, store payment data in Nigeria

The apex bank said the new measure aims to promote transparency, reduce market concentration risks, and enhance the resilience of the country's payments ecosystem.

The Central Bank of Nigeria (CBN) has directed all financial institutions with digital payment operations to disclose the Ultimate Beneficial Ownership (UBO) of significant shareholders, in line with existing laws and regulatory requirements.

The apex bank said the new measure aims to promote transparency, reduce market concentration risks, and enhance the resilience of the country’s payments ecosystem.

In a circular issued to Deposit Money Banks (DMBs), Payment Service Providers (PSPs), fintechs, and other financial institutions on Monday, the apex bank stated that the rapid growth of electronic payments has raised concerns about market concentration, operational dependence, and transparency of ownership.

The bank said the increasing adoption of digital financial services and the emergence of dominant players in key payment activities have also raised concerns about the localisation of critical payment data.

The CBN added that all affected institutions must maintain accurate and up-to-date UBO records and make such information available to the bank upon request.

“All Deposit Money Banks, Payment Service Providers, and Other Financial Institutions with digital payment footprints shall disclose the Ultimate Beneficial Ownership (UBO) of significant shareholders in accordance with applicable extant laws and regulations, including Anti-Money Laundering, Combating the Financing of Terrorism, and Counter-Proliferation Financing (AML/CFT/CPF) regulations.

“Institutions shall maintain accurate and up-to-date UBO records and make such information available to the CBN upon request,” the apex bank said.

Market share

The regulator further mandated all financial institutions and payment participants operating in Nigeria to ensure that payment transaction data generated within the country is stored and managed locally in compliance with applicable data protection laws.

Full compliance with the data localisation requirement will take effect on 1 January 2027, the regulator said.

As part of efforts to promote competition and prevent excessive market dominance, the CBN introduced new market structure rules for card issuing and merchant acquiring activities.

Under the new framework, any licensed financial institution that controls more than 25 per cent of the card-issuing market within a rolling 12-month period will not be permitted to hold more than 15 per cent of the merchant-acquiring market during the same period.

Similarly, institutions holding more than 25 per cent market share in merchant-acquiring activities will be restricted to a maximum of 15 per cent market share in card-issuing operations.

The CBN also directed all regulated entities to submit monthly market-share returns using the prescribed templates and reporting timelines.

“Any licensed financial institution engaged in card-issuing activities, whether individually or as part of a group of related entities, that holds more than 25 per cent market share in card issuing within any rolling 12-month period shall not hold more than 15 per cent market share in merchant-acquiring activities during the same period.

“Any licensed financial institution engaged in merchant-acquiring activities, whether individually or as part of a group of related entities, that holds more than 25 per cent market share in merchant-acquiring activities within any rolling 12-month period shall not hold more than 15 per cent market share in card-issuing activities during the same period,” the statement read.

According to the circular, affected financial institutions are required to take all necessary measures to achieve full compliance with the market structure requirements by 31 December.

The apex bank warned that it will monitor compliance and may impose supervisory sanctions on institutions that fail to comply with the circular’s provisions, in accordance with applicable laws, regulations, and guidelines.