Nigeria’s fintech industry is facing a major regulatory shift as the Central Bank of Nigeria (CBN) moves to restructure how financial technology companies grow, operate and compete.
For years, fintech firms in the country followed a familiar path starting with payments, expanding into merchant services, then moving into lending, savings and eventually operating as regulated financial institutions. This model helped drive massive growth, with Nigeria’s electronic payments sector recording transactions worth ₦1.2 quadrillion in 2025.
However, the CBN is now stepping in with sweeping reforms aimed at reshaping the industry into a more stable and transparent system. Between March and June, the regulator introduced a series of policies targeting market dominance, ownership transparency, anti-money laundering standards and operational structure.
A key focus of the reforms is how large fintech companies are structured. Many of them now operate multiple financial services payments, lending and banking under a single umbrella. While this has boosted efficiency and growth, regulators are concerned about excessive market power and systemic risks.
To address this, the CBN is proposing stricter “ring-fencing” rules that will require each arm of a fintech group to operate independently. This means separate governance, capital requirements, risk management systems and regulatory accountability for each subsidiary, rather than functioning as one integrated entity. The move is expected to increase operating costs and reduce the ease with which fintechs previously scaled across sectors.
The regulator is also introducing limits on market concentration. Under the new guidelines, any company controlling more than 25% of consumer payment services cannot hold more than 15% of merchant acquiring, and vice versa. Firms will be required to report market share regularly and comply fully by 2026.
This marks a clear shift from growth-at-all-costs to controlled expansion. Fintechs may now need to focus on specific segments instead of dominating every layer of the financial ecosystem.
In addition, the CBN is raising the bar on compliance. New anti-money laundering rules demand stronger governance, clearer accountability and more robust internal systems. Fintechs are now expected to function more like traditional financial institutions, with deeper investment in risk management, auditing and regulatory compliance.
The overall message from the regulator is clear: scale alone is no longer enough. Sustainability, transparency and resilience will define the next phase of Nigeria’s fintech evolution.
Source: TechCabal
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