The Central Bank of Nigeria (CBN) has introduced new measures aimed at curbing market concentration in the country’s payments ecosystem, including limits on the market share operators can hold across card issuing and merchant acquiring services.
This is according to a circular signed by the director of the payments system supervision department, Rakiya Yusuf, on Monday. The apex bank said rapid growth in electronic payments and digital financial services has increased the market presence of some operators, raising concerns about competition and resilience in the sector, and that the measures are aimed at addressing concerns of market concentration, operational dependence, systemic importance, and the localisation of payment transaction data.
Under the new framework, any financial institution controlling more than 25 percent of the card issuing market would be restricted in its participation in merchant acquiring services, and any institution holding more than 25 percent of the merchant acquiring market would be restricted to no more than 15 percent of card issuing activities during the same rolling twelve-month period.
The CBN stated that the measures aim to improve transparency through beneficial ownership disclosure, address concentration risk, promote a fair and competitive payments ecosystem, and safeguard the integrity of the Nigerian payments system while ensuring the localisation of payments transaction data within Nigeria.
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