CBN Restricts Payment Firms From Dominating Consumers and Merchants

The Central Bank of Nigeria (CBN) has introduced new market share restrictions for payment operators, aimed at preventing excessive concentration in the country’s fast-growing digital payments industry and reducing systemic risks posed by dominant players.

What Are the New Market Share Caps?

The CBN observed rapid growth in electronic payments and the emergence of operators with substantial market presence across key payment activities. While those developments boosted innovation and financial inclusion, they also raised concerns about market concentration and over-dependence on a small number of dominant firms.

It’s easy to see why those concerns arose. Moniepoint alone reported that 8 out of 10 in-person payments in Nigeria passed through its terminals in 2025, processing 412 trillion Naira across more than 14 billion transactions. Fintechs like OPay, PalmPay, Paystack, and Flutterwave have followed a similar model building extensive merchant payment networks while simultaneously expanding into customer-facing banking services.

Any institution controlling more than 25% of Nigeria’s card issuing market cannot control more than 15% of the merchant acquiring market within the same rolling 12-month period. The mirror rule also applies. Institutions controlling more than 25% of merchant acquiring cannot hold more than 15% of card issuing.

In plain terms, a company cannot dominate both sides of the payments chain at once. The restrictions are expected to have a major impact on fintech firms that have rapidly expanded from merchant services into digital banking and consumer finance. Traditional banks are also unlikely to escape the new restrictions, as large lenders seeking to dominate merchant acquiring while maintaining strong positions in retail banking may face similar limitations.

The Difference Between Card Issuing and

Merchant Acquiring

Card issuing is the bank or fintech that gives you, the customer, your card or an account. When you open an account with a Nigerian bank and get issued a debit card or wallet, that institution is your card issuer. It’s the consumer-facing side that manages your money, approves your transactions, and assumes the risk if you default or dispute a charge.

Merchant acquiring is the institution on the other side, the one that signs up businesses to accept payments and processes those transactions on their behalf. When a shop owner gets a t POS terminal or integrates checkout on their website, the issuing body is acting as the merchant acquirer. They are the ones settling funds into the merchant’s account after a sale.

So when you tap your GTBank card on a Moniepoint terminal, GTBank is the issuer, and Moniepoint is the acquirer. The two institutions communicate behind the scenes, usually through a network like Verve, Mastercard, or Visa, to complete the transaction and split the fees.

The CBN’s concern is that some players are becoming dominant on both sides simultaneously. Moniepoint, for instance, is already Nigeria’s largest merchant acquirer, but as it expands into personal banking and card products, it also starts competing as an issuer. The new rules cap that kind of dual dominance, so no single company can control how consumers spend their money and how merchants receive it.

Financial institutions have until December 31, 2026, to achieve full compliance with the market structure requirements. The CBN said it will monitor compliance and impose supervisory sanctions where necessary in line with applicable laws, regulations, and guidelines.

What Does This Mean for Nigeria’s Fintechs?

The rules land at a particularly consequential moment. Paystack recently restructured into a holding company, The Stack Group, which oversees its core payments unit, the consumer app Zap, a microfinance bank, and a venture arm.

Flutterwave also secured a microfinance bank licence after acquiring open banking startup Mono. Both moves signal a broader push by fintechs to become full-service financial platforms, and that is precisely the kind of cross-market expansion the CBN’s new caps are designed to check.

The CBN’s new rule essentially tells Nigeria’s biggest payment companies that they cannot be powerful everywhere at once. Firms like Moniepoint, OPay, and PalmPay have spent years building dominance on both the consumer and merchant sides of payments, and those days are now numbered, they’ll have to choose a lane. This will likely slow the rapid consolidation that has made Nigerian fintech so competitive, give smaller players more room to grow, and push the giants toward doing fewer things better, rather than trying to own the entire payments chain from the customer’s wallet to the merchant’s terminal.