Nigeria (NG)

Licensing, Authorisation & Market Access

Nigeria operates a central-bank-primary, activity-based payments licensing regime. Under the CBN multi-tier activity-based PSP framework — established by the December 2020 Licence Categorisation circular and the May 2021 capital requirements under BOFIA 2020 — Switching & Processing and Mobile Money Operator (MMO) licences require ₦2bn shareholders' funds (Switching also carries a ₦2bn refundable escrow), while PTSP and PSSP licences require ₦100m plus ₦100m escrow. Only MMOs and Payment Service Banks (PSBs) may hold customer funds, and multi-licence groups must adopt a Payment Service Holding Company (PSHC) structure. No single EMI-style licence exists; activity-based categorisation is the structural anchor of the Nigerian payments regime, and the fund-holding versus processing-only split is determinative for how operators enter the market.

For firm-type purposes the regime cuts cleanly: bank-PSPs and PSBs sit on the deposit/fund-holding side, while non-bank PIs/EMIs operating as PSSPs are confined to processing and must partner with a fund-holding institution. The bank-partnership exemption is the standard route by which non-bank processors access fund-holding capability. This split shapes every market-entry, safeguarding and partnership decision in Africa's largest fintech market. The convergence dynamic visible in W6 and W13 — non-bank fintechs acquiring microfinance banking licences — is in part a response to this structural division, as operators seek deposit-holding status the activity-based categorisation otherwise denies them.

Outlook

The activity-based regime is established and stable as a baseline. The live tension is between fintech consolidation into deposit-taking banking and the CBN's operations-separation directive against the largest non-bank groups; how that resolves will determine whether the PSHC structure remains the dominant grouping model or whether structural separation reshapes group architecture.

Stablecoins & Digital Money

Nigeria has a bifurcated digital-money regime. The Investments and Securities Act (ISA) 2025 classifies cryptocurrencies, virtual and digital assets and tokenised investment contracts as securities and grants the SEC apex jurisdiction over all VASPs, covering registration, licensing, disclosure and anti-fraud. Stablecoins — excluding CBDC — are treated as securities where they represent investment interests, carrying issuer licensing, reserve-backing and AML/KYC obligations; the SEC Accelerated Regulatory Incubation Programme (ARIP) is the sandbox and onboarding route, with Busha and Quidax holding approvals-in-principle. This places Nigeria among the few jurisdictions regulating stablecoins as financial instruments with reserve and disclosure obligations.

On the payment-use side, on 22 December 2023 the CBN issued VASP Account Guidelines permitting banks to operate accounts for and service SEC-licensed crypto firms under strict compliance conditions, reversing the February 2021 ban on crypto transactions by financial institutions. Bank account access for SEC-licensed VASPs is the operational precondition for compliant crypto and stablecoin payment flows, and the December 2023 reversal re-opened banking rails closed since 2021. The combined picture is a CBN/SEC division of labour: the CBN governs payment-use e-money and CBDC; the SEC governs security-use stablecoins and virtual assets.

A note on dates: research records the ISA 2025 enactment as 31 March 2025, but multiple sources confirm the signing date as 25 March 2025. The substantive security-classification position is unaffected by this discrepancy. No standalone fiat-backed national stablecoin instrument is yet in force; stablecoins are regulated by function.

Outlook

The stablecoin framework is escalating. Formal stablecoin definitions remain emerging, and the regulated-stablecoin cross-border settlement corridors contemplated under Vision 2028 (see W9) are the principal forward vector.

Consumer Protection & APP Fraud

The headline development is the CBN's draft Guidelines for Handling Authorised Push Payment (APP) Fraud, an exposure draft dated 26 November 2025, introducing mandatory reimbursement: institutions acknowledge complaints within 24 hours with a unique case reference, investigate within 14 working days, and reimburse within 48 hours of conclusion (16 working days end-to-end); customers must report within 72 hours; and where neither sending nor receiving bank is at fault but the customer qualifies, the two institutions share the refund equally. Electronic-payment fraud reportedly fell 51% in 2025. The regime is functionally analogous to the UK PSR model and materially shifts fraud-liability economics onto bank-PSPs, though it remains an exposure draft not yet in force.

The standing redress architecture sits with the CBN Consumer Protection & Financial Inclusion Department under the Consumer Protection Regulation 2019 and Framework 2016. Complaints route provider-first then escalate to the CPFD, which operates 24/7 with a 94% timely-resolution rate. In H1 2025 the CBN resolved 9,771 of 10,704 complaints (up 143.3% year on year), with electronic-transaction and card issues at 51.5% and fraud at 39.27%, and refunds of ₦7.17bn. Consumer advocates support exploring an independent financial ombudsman.

Outlook

Consumer protection is escalating. The APP-fraud reimbursement draft is expected to be finalised in H2 2026, at which point fraud-liability economics shift onto banks and PSPs; the ombudsman debate signals a possible future structural change to the redress layer.

AML/CFT & Financial Crime (Sentinel-fed)

This module is sourced from the Sentinel feed; WPM carries only the payments-context impact and performs no original illicit-finance analysis. Per Sentinel, at the FATF Plenary held 22–24 October 2025 Nigeria — alongside Burkina Faso, Mozambique and South Africa — was removed from the FATF grey list after completing its 19-point action plan by May 2025. The principal AML/CFT/CPF laws are the Money Laundering (Prevention and Prohibition) Act 2022, the Terrorism (Prevention and Prohibition) Act 2022 and the Proceeds of Crime (Recovery and Management) Act 2022, supervised by the CBN with the NFIU and EFCC. Reforms included operationalising a Beneficial Ownership Register, broader DNFBP supervision and strengthened NFIU–EFCC coordination; the next mutual evaluation is expected in 2027.

The payments impact is the relevant lens here: delisting reduces de-risking pressure and improves correspondent-banking, remittance and credit-access conditions for Nigerian bank-PSPs — a direct positive for the country's payment corridors and settlement-tier access. Anything beyond payments context is routed to the Financial Integrity Monitor.

Outlook

The AML/CFT backdrop is improving from a payments standpoint following the October 2025 delisting. The next FATF mutual evaluation in 2027 is the key forward marker; its outcome will shape the correspondent-banking and de-risking trajectory. See further analysis in the Sentinel feed.

Commercial Intelligence (M&A, Investment & Product)

The trailing-12-month commercial cluster captures fintech consolidation into banking. Flutterwave acquired Nigerian open-banking startup Mono in an all-stock transaction reportedly valued between US$25m and US$40m; exact terms were not publicly disclosed; the deal completed in December 2025 and was made public in January 2026, with the rationale of consolidating open-banking and data-aggregation capability ahead of banking-licence expansion. Flutterwave then secured a Nigerian national microfinance banking licence — via the Mono acquisition — in April 2026, after crossing US$40bn in lifetime payments, allowing it to hold customer deposits and issue loans directly; this moves Flutterwave from payments-processor to deposit-taking bank, changing its safeguarding and prudential posture. Paystack — Stripe-owned and valued at around US$500m — acquired Ladder Microfinance Bank in January 2026 (value not publicly disclosed), rebranding it Paystack Microfinance Bank to offer business lending beyond its payments licence; a second major fintech acquiring a microfinance bank confirms consolidation-into-banking as a structural trend rather than a one-off.

On the investment side, in January 2025 Moniepoint secured a strategic investment from Visa to accelerate continental expansion (amount not publicly disclosed), following its October 2024 US$110m unicorn round — Visa taking a stake in a leading Nigerian acquirer signals incumbent-scheme interest in African rails even as AfriGo competes domestically. Separately, Ripple reportedly invested in Flutterwave's Series E round to jointly accelerate stablecoin-based payment solutions across Africa (amount not publicly disclosed); this is reported and unconfirmed, carried at rumoured event status and Possible confidence.

Outlook

The commercial-intelligence cluster is escalating. The fintech-into-banking M&A pattern is the defining commercial dynamic; exact deal values across the cluster remain undisclosed, and the single-aggregator anchors behind the Ripple/Flutterwave and operations-separation items warrant corroboration before heavier-weight judgments are built on them.

Conduct, Safeguarding & Promotions

The Nigerian safeguarding mechanism for non-bank e-money rests on a combination of trust-account segregation and deposit-insurance-style cover. Under the CBN Mobile Money Services Framework (July 2021), MMO customer mobile-money balances are held in nominee accounts on behalf of customers under CBN Payments System Management Department conditions, and the total outstanding unspent subscriber float must be insured up to the applicable NDIC coverage level. This is the functional analogue to UK and EU safeguarding regimes, relevant to any operator holding subscriber balances.

The firm-type distinction is central here: this safeguarding architecture applies to non-bank PIs/EMIs operating as MMOs that hold subscriber float, whereas bank-PSPs and PSBs hold funds as deposits under the prudential regime rather than as segregated e-money float. The mechanism maps to a trust-account model, with NDIC insurance forming a secondary protective layer for non-bank e-money float.

Outlook

The safeguarding position is established. The forward conduct development to watch is the APP-fraud reimbursement draft (carried in W10), which would add a mandatory consumer-redress liability layer on top of the existing fund-protection architecture.

Operational Resilience & Critical Infrastructure

Nigeria has no standalone DORA-equivalent; operational resilience is embedded in its cybersecurity regime. The CBN Risk-Based Cybersecurity Framework for DMBs and PSBs (May 2024) replaces the October 2018 guidelines, applies to commercial, merchant and non-interest banks and PSBs as Supervised Financial Institutions, incorporates BOFIA 2020 and the NDPA 2023, mandates a board-level CISO, an annual cybersecurity self-assessment by 31 March, and incident reporting to the CBN within 24 hours. The financial sector is designated National Critical Information Infrastructure under Part 7.5 of the National Cybersecurity Policy. The 24-hour incident-reporting clock, mandatory CISO and 31 March self-assessment define the compliance burden for banks and PSBs and increasingly for fintechs.

That perimeter is widening. In a 30 March 2026 circular the CBN mandated DMBs, PSBs, microfinance lenders, fintechs and other institutions to complete a newly deployed Cybersecurity Self-Assessment Tool (CSAT) capturing governance, third-party exposures, incident response and operational resilience, reflecting data as of 31 December 2025. This extends formal third-party-exposure and resilience self-assessment beyond banks to fintechs and MFBs, signalling a widening operational-resilience supervisory perimeter.

Outlook

Resilience supervision is escalating. The CSAT extension to non-bank operators is the clearest signal that the supervisory perimeter is broadening; absent a dedicated DORA-equivalent, the cybersecurity framework remains the vehicle through which operational-resilience expectations are imposed.

Scheme & Network Compliance

Nigeria's card-scheme landscape now spans four schemes after the CBN and NIBSS launched the national domestic scheme AfriGo on 26 January 2023, alongside Visa, Mastercard and the domestic Verve by Interswitch, to reduce dollar-denominated scheme charges that draw on Nigeria's foreign reserves. AfriGo is an FX-leakage-driven sovereign-scheme play competing directly with Visa and Mastercard on Nigerian card rails, with cost and reserve implications for issuers and acquirers.

The rules layer is detailed and prescriptive. CBN Guidelines on Operations of Electronic Payment Channels (2020) and the POS Card Acceptance Guidelines require only CBN-licensed institutions to act as acquirers, mandate PCI DSS / PA-DSS / P2PE compliance and EMV chip-and-PIN, bar card schemes (or entities they own 20% or more of) from acquiring, prohibit merchant surcharging, and require disputed POS transactions to be resolved within five working days. A September 2024 circular requires all PSPs to route POS operations through one of two licensed PTSAs — NIBSS since 2011 and Unified Payment Services as the second PTSA from April 2024. The April 2024 second-PTSA licensing breaks NIBSS's 13-year monopoly, a notable infrastructure shift. These rules apply to bank-PSP acquirers; the acquirer-licensing restriction is the firm-type gate.

Outlook

Scheme and network compliance is escalating, driven by AfriGo's competitive entry and the breaking of the NIBSS PTSA monopoly. The cross-current to watch is incumbent-scheme interest in Nigerian rails even as a sovereign scheme competes domestically (see the Visa–Moniepoint stake in W13).

Payment Corridor Dynamics

Nigeria's diaspora-inbound remittance corridor is the country's most commercially significant payment corridor, and it was restructured by the Revised Guidelines for International Money Transfer Services (31 January 2024). These confine IMTOs to inbound-only transfers with Naira payout (cash capped at $200 equivalent), set a US$1m minimum capital floor (Naira equivalent for indigenous IMTOs), and prohibit banks and fintech companies from holding IMTO licences — though banks may act as agents. An accompanying circular removed the −2.5%/+2.5% allowable-rate cap so payouts use prevailing market rates. Personal remittances received rose 9% to a five-year high of US$20.9bn in 2024. The firm-type distinction is explicit: IMTO principals are a distinct non-bank category, banks and fintechs are barred as principals, and banks may participate only as agents.

The intra-African corridor is also being eased. A 28 April 2025 CBN circular simplified PAPSS transaction documentation for intra-African trade under AfCFTA and permitted commercial banks to source FX for PAPSS via the official market, while the CBN with NIBSS launched the Non-Resident BVN (NRBVN) platform on 13 May 2025 to deepen diaspora flows. Together these lower friction on intra-African and diaspora corridors and advance AfCFTA settlement integration.

Outlook

Both the diaspora-inbound and PAPSS intra-African corridors are escalating. The rate-cap removal and NRBVN onboarding rail are the principal near-term enablers; the Vision 2028 cross-border settlement repositioning (W9) is the longer-horizon corridor vector.

Industry Structure & Commercial

Nigeria is Africa's largest fintech market — roughly 28% of African fintech firms, 430-plus companies and around 36% of African fintech funding across 2020–H1 2024 — with 2024 e-payment volumes of 44.8bn (up 16% year on year) and values of ₦3.1 quadrillion (about US$2.03tn, up 39%); fintech funding fell 17.1% to US$331m in 2024. The market is dominated by non-bank fintechs including Moniepoint, OPay, PalmPay, Flutterwave and Paystack; Moniepoint serves over 10m businesses, processes more than 1bn transactions monthly with TPV above US$22bn, and reached unicorn status in October 2024. This structural picture is carried at Assessed confidence pending more institutional data anchors.

The defining 2025–2026 dynamic is the structural shift of non-bank fintechs into banking, running in direct tension with the CBN's directive ordering major fintechs including OPay and Moniepoint to separate their payment-processing and banking operations within 90 days, citing market-concentration concerns and conflicts of interest. That directive rests on single-aggregator sourcing and is carried at Assessed confidence; discrete deals behind the consolidation trend are routed to W13.

Outlook

Industry structure is escalating. The unresolved question is whether the separation directive — its 90-day deadline falling in Q3 2026 — will force group restructuring against the consolidation-into-banking trend. Both the consolidation cluster and the directive merit targeted follow-up sourcing before heavier-weight judgments are built on them.

Legal & Litigation

The dominant litigation thread is Nigeria's enforcement campaign against Binance, which includes a February 2025 dispute and a reported US$81.5bn lawsuit over alleged currency devaluation, FIRS tax-evasion charges over unpaid VAT and corporate income tax, detention of Binance executives over alleged FX manipulation, and Binance's subsequent disabling of naira services. ISA 2025 expanded SEC enforcement powers to include administrative cautions, liens on bank accounts, and asset seizure and forfeiture. The campaign signals aggressive state action against unlicensed crypto and FX intermediation, and the new enforcement powers raise the stakes for non-compliant VASPs.

WPM carries only the litigation and enforcement-precedent angle here. The illicit-finance, FX-manipulation and sanctions-evasion dimensions of the Binance matter are routed to the Financial Integrity Monitor; original illicit-finance analysis is not performed in this module.

Outlook

The litigation environment is escalating, with ISA 2025's expanded enforcement toolkit raising the precedent risk for crypto and FX intermediaries operating outside the SEC authorisation perimeter.

Merchant Acquiring & Risk

Nigerian merchant acquiring is restricted to CBN-licensed, card-neutral institutions. PTSPs deploy and maintain POS terminals while NIBSS and — since April 2024 — Unified Payments act as PTSAs routing and settling POS transactions. Merchants must pass due diligence before terminal allocation, may not surcharge or discriminate by scheme, and disputed card and POS transactions must be resolved within five working days. POS devices now require NIBSS certification plus GPS tracking for recertification. The market is POS and agent-led, dominated by the Moniepoint, OPay and PalmPay agent networks.

For firm types, the market spans both bank-PSP acquirers (who must hold the CBN acquiring licence) and the non-bank agent networks that dominate physical acceptance. The PCI-DSS, NIBSS-certification, GPS-recertification and SLA burdens are real entry barriers for early-stage acquirers — an under-indexed operational dimension. This module cross-references the W4 scheme rules.

Outlook

Acquiring structure is stable. The GPS-recertification control is a notable operational tightening, and specialist coverage of merchant-acquiring operations remains under-indexed relative to regulatory and legal-firm sourcing.

Product Innovation & Market Development

NIBSS Instant Payments (NIP) is the dominant account-to-account real-time rail at around 70% of NIBSS volume and the first instant payment system in Africa to reach 'Maturity' on AfricaNenda's inclusivity spectrum. It settles in central-bank money via deferred net settlement (four times daily) with the CBN as settlement agent, has 29 direct commercial-bank participants and around 670 indirect participants (541 MFIs, 10 MMOs, 5 PSBs), and supports card, e-money, EFT and CBDC instruments. NIP is the backbone real-time rail of Africa's largest payments market and the continent's most mature inclusive instant payment system — the settlement substrate every Nigerian payment operator depends on, spanning both bank-PSP and non-bank participation tiers.

In parallel, under the Nigeria Payments System Vision 2028 the CBN is repositioning the eNaira — Africa's first CBDC, launched October 2021, with under 0.5% retail adoption — as cross-border and settlement infrastructure rather than a retail product. It is exploring NIP–eNaira integration, PAPSS/AfCFTA alignment and regulated-stablecoin settlement corridors, leveraging more than US$20bn in annual diaspora remittances. Low retail uptake is attributed to BVN/NIN access requirements excluding the unbanked and overlap with existing payment apps. This pivot is carried at Assessed confidence.

Outlook

Product development is escalating. The strategically significant move is the eNaira's repositioning from a failed retail product toward cross-border settlement, a multi-year Vision 2028 horizon with implications for diaspora-remittance economics and regulated-stablecoin corridors.

Correspondent Banking, Settlement & Access

The analytical spine of this module is the bank versus non-bank settlement-access asymmetry. NIBSS — owned by the CBN and Nigerian banks and incorporated under CAMA 2020 — is the payment-system operator and clearing coordinator, with the CBN acting as settlement agent using deferred net settlement (four times daily for NIP) and no FX hub or correspondent banks in the domestic settlement layer. Direct settlement membership is confined to 29 commercial banks; non-bank operators reach settlement only indirectly through the indirect-participant tier. NIBSS routes all inter-bank e-channel transactions through central anti-fraud solutions and can issue hold or post-no-debit instructions.

Two developments are reshaping access tiers. Correspondent-banking access improved following the October 2025 FATF delisting, easing de-risking pressure on Nigerian banks. And the 28 March 2024 recapitalisation set ₦500bn minimum capital for international-authorisation banks (₦200bn national, ₦50bn regional), reshaping which institutions can hold international-authorisation settlement status. The direct/indirect split is precisely the bank-PSP versus non-bank access asymmetry that this module foregrounds.

Outlook

Settlement and access is escalating. The 2024 recapitalisation will continue to determine which institutions hold the top settlement tier, while the post-FATF correspondent-banking improvement is the principal positive structural shift for cross-border access.