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.
