New rules limit dominant financial institutions to 25% in one segment and 15% in the other, as regulator moves to curb concentration risks and strengthen Nigeria’s payments ecosystem.

The Central Bank of Nigeria (CBN) has rolled out fresh measures to reduce market dominance and promote fair competition in the country’s fast-growing payments ecosystem, placing strict limits on how much market share financial institutions can control across card issuing and merchant acquiring services.

Card issuing involves providing payment cards to customers, while merchant acquiring refers to processing card payments for businesses.

In a circular issued on Monday and signed by Rakiya Yusuf, Director of the Payments System Supervision Department, the apex bank said the new framework is designed to tackle rising concerns around market concentration, operational dependence, systemic risks, and the need to localise transaction data within Nigeria.

The CBN noted that the rapid expansion of electronic payments and digital financial services has significantly increased the dominance of a few operators, raising questions about competition and the overall resilience of the sector.

According to the regulator, the policy also seeks to enhance transparency through the disclosure of beneficial ownership, while safeguarding the integrity of Nigeria’s payment systems.

Under the new rules, any financial institution controlling more than 25 percent of the card issuing market within a rolling 12-month period will be restricted to a maximum of 15 percent market share in merchant acquiring during the same period. The same restriction applies in reverse: institutions with over 25 percent share in merchant acquiring cannot exceed 15 percent in card issuing.

The move is part of a broader regulatory push by the CBN to tighten oversight of the financial system. Earlier, on June 10, the apex bank released an exposure draft outlining revised guidelines for licensing and regulating financial holding companies (HoldCos). Among other proposals, the draft requires HoldCos to hold shares in subsidiaries directly and caps such ownership at 51 percent.

The latest directive signals the CBN’s continued effort to foster a more competitive, transparent, and resilient financial ecosystem amid Nigeria’s ongoing digital payments boom.