The Central Bank of Nigeria (CBN) has told all financial institutions that deal with digital payments to reveal the Ultimate Beneficial Ownership (UBO) of important shareholders, following existing laws and rules.
The CBN said this new rule aims to encourage transparency, lower market risks, and strengthen the country's payment system.
In a notice sent out on Monday to Deposit Money Banks (DMBs), Payment Service Providers (PSPs), fintechs, and other financial bodies, the CBN pointed out that the fast growth of electronic payments has raised worries about market dominance, operational reliance, and ownership clarity.
The bank also mentioned that more people using digital financial services and the rise of major players in key payment roles have led to concerns about where important payment data is kept.
The CBN stated that all affected institutions must keep accurate and current UBO records and provide this information to the bank when asked.
"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 bank said.
Market share
The regulator also ordered all financial institutions and payment players in Nigeria to make sure that payment transaction data created in the country is stored and handled locally, following relevant data protection laws.
The requirement for local data storage will start on 1 January 2027, according to the CBN.
To boost competition and avoid too much market power, the CBN has set new market rules for card issuing and merchant acquiring activities.
With the new rules, any licensed financial institution that controls over 25 percent of the card-issuing market in a 12-month period will not be allowed to hold more than 15 percent of the merchant-acquiring market during the same time.
Also, institutions with more than 25 percent market share in merchant-acquiring will be limited to a maximum of 15 percent share in card-issuing.
The CBN has also told all regulated bodies to submit monthly market-share reports using the required templates and 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 percent market share in card issuing within any rolling 12-month period shall not hold more than 15 percent 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 percent market share in merchant-acquiring activities within any rolling 12-month period shall not hold more than 15 percent market share in card-issuing activities during the same period," the statement said.
The circular said that affected financial institutions must take all necessary steps to meet the market structure rules by 31 December.
The CBN warned that it will keep an eye on compliance and may take action against institutions that do not follow the rules, in line with relevant laws, regulations, and guidelines.
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