Nigeria’s digital‑finance transformation is fostering innovation while safeguarding stability across the payment ecosystem. The Central Bank of Nigeria (CBN) recently extended the Payment System Vision roadmap to 2028, an ambitious commitment to modernise payments infrastructure and strengthen cybersecurity. The push for contactless payment, revised agent banking guidelines and improved integration across switching companies are creating seamless opportunities for the payment markets, reports Assistant Editor COLLINS NWEZE
The ongoing payment infrastructure modernisation is an indicator that Nigeria is making significant progress in the e-payment space. Already, more than 12 million contactless payment cards are now in circulation while the Central Bank of Nigeria (CBN)-instituted regulatory sandbox has expanded to over 40 fintech innovators, enabling safe experimentation and responsible scaling of new digital‑finance solutions.
The revised agent‑banking guidelines have tightened anti‑money‑laundering controls, including geo‑fencing of high‑risk areas, while improving consumer protection at the last mile. The integration across switching companies has improved, bringing Nigeria closer to seamless domestic interoperability. CBN Governor, Olayemi Cardoso, disclosed recently that supported by these measures, Nigeria today stands among Africa’s most advanced digital payments markets, with a dynamic fintech ecosystem that has produced eight of the continent’s nine unicorns.
He explained that by mid-2025, leading fintech apps had surpassed 10 million downloads each, with one surpassing 50 million downloads, reflecting deep consumer adoption. “In parallel, our engagement with the global fintech community has been a further significant supportive mechanism. The Strategic Fintech Dialogue at the IMF Fall Meetings brought together policymakers, innovators and investors, culminating in a consultative report that will guide Nigeria’s next phase of fintech evolution,” Cardoso said during the Annual Bankers’ Dinner recently held in Lagos.
He explained that as digital assets, tokenisation and stable coins become critical topics for central banks worldwide. “Our stance remains clear: we will lead thoughtfully, with discipline and clarity of purpose. Innovation must proceed responsibly, anchored in consumer protection and financial stability,” he said.
Crucial moves to boost e-payment
In banking, convenience and security are crucial in securing customers’ trust and satisfaction. That explains why the CBN is taking measures to ensure that Nigeria’s e-payment space is safe and secured. The implementation of new rules on Point of Sale (PoS) terminals and other payment systems reaffirms CBN’s commitment to leveraging digital channels in enhancing access to finance and credit, particularly for under-served populations. It is also a step towards improving transaction monitoring and bolstering consumer protection for the population.
The CBN raised the innovation bar with the release of a new e-payment guidelines titled: “Migration to ISO 20022 Standard for Payment Messaging and Mandatory Geo-Tagging of Payment Terminals”. The policy aligns with CBN’s move to entrench transparency, compliance and secured e-payment space. According to Cardoso, the Nigerian payments ecosystem has been ahead of many advanced economies, yet has not always received the recognition it deserves. “Many innovations that other countries are only now experiencing have been part of our system for years. We must celebrate these successes, as they contribute to building our global reputation. Nigeria’s dynamic fintech ecosystem has driven financial inclusion and positioned the country as a hub of innovation in Africa,” he said.
Cardoso explained that despite a challenging external environment, Nigerian Fintechs continue to shine, attracting significant foreign investment and several have achieved global unicorn status this year. Their innovations, alongside other financial service providers, have fuelled growth in transactions and made financial services more affordable and accessible for many more Nigerians. “We must continue to leverage this channel to enhance access to finance and credit, particularly for under-served populations. However, I urge fintech companies and banks to ensure their platforms are not exploited for fraudulent activities. Strengthening the KYC onboarding process is essential to prevent malicious actors from exploiting our financial system.”
“Additionally, these institutions must prioritise improving transaction monitoring and bolstering consumer protection measures to ensure that digital channels remain safe, especially for the most vulnerable segments of our population.” Cardoso said that while the apex bank continues to lay the foundation for price stability and foster a conducive policy environment, the role of banks in this journey remains crucial. “At the Central Bank, we have intensified surveillance of market activities to ensure compliance. Together, we must build a market based on strong governance and transparency. As regulators, we will maintain a zero-tolerance approach to compliance violations,” he said.
Speaking during CBN Fair in Lagos, CBN Acting Director, Corporate Communications Department, Mrs. Hakama Sidi Ali, explained that as a means of protecting banks’ customers and ensuring that they are not short-changed, the CBN launched the Unified Complaints Tracking System (UCTS), aimed at streamlining and improving the management of consumer complaints against financial institutions. The system, alongside a USSD code (*959#) for verifying licensed institutions, enhances transparency and consumer protection in the Nigerian financial sector. “The core objective of this engagement, therefore, is to sensitise members of the public on how the bank’s policies and innovations can enhance their lives and livelihood and contribute to the growth and development of the Nigerian economy,” she said.
Branch Controller, Central Bank of Nigeria, Lagos, Sunday Daibo, said the apex bank is taking steps to ensure more people are brought into the digital payment network. He said: “In a world where technology is reshaping economies and redefining how people interact with financial services, alternate financial services have emerged not as an option, but as a necessity. They are the bridges connecting the underserved populations to the formal financial system.”
President, Association of Bureaux De Change Operators of Nigeria (ABCON), Dr. Aminu Gwadabe, reiterated the benefits of improved technology and digitisation to seamless services in the financial sector. He said that the future of financial services delivery, is digital and all layers of financial sector should embrace technology in their services delivery to the people.
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Industry statistics
According to data from the Nigeria Interbank Settlement System (NIBSS), since their introduction in 2013, PoS terminals have become a primary source of cash access for many Nigerians, with an average of about 1,600 operators per square kilometre. As of March 2025, there were 8.36 million registered PoS terminals, of which 5.90 million were active or deployed. Transactions through these terminals reached N10.51 trillion in Q1 2025, representing a 301.67 per cent increase from Q1 2024. In 2024, NIBSS was mandated to develop a geofencing plan to prevent PoS terminals from being used outside their registered deployment addresses. Under this directive, any terminal moved beyond its certified location will be automatically disabled.
To ensure compliance, the CBN has ordered all payment terminals to be registered with a Payment Terminal Service Aggregator (PTSA) —NIBSS or Unified Payment Services Limited — with accurate latitude/longitude coordinates indicating the merchant/agent place of business/service and status. Terminals not directly routed to a PTSA are not permitted to transact, and all operators must ensure that their PoS terminals and applications are certified by the National Central Switch (NCS).
Regulatory insights and instant payments in Nigeria and beyond
For the CBN, digital innovations ranging from self-service technologies like cell phones, online and mobile banking, Artificial Intelligence, big data, blockchain technology, distributed ledgers, among others, have greatly challenged orthodox systems and helped improve the operational efficiency of financial institutions as they respond to customer demands for more innovative services.
Recognising the growing importance of consumer protection in an increasingly digital financial landscape, Cardoso embarked on a comprehensive review of consumer protection regulations. This review sought to upgrade the regulatory framework to address emerging risks posed by the rapid growth of Fintech and digital banking solutions.
Nigeria and Africa’s digital payments landscape is expanding at an unprecedented pace, signalling a shift toward more inclusive and interoperable financial systems. Currently, 36 instant payment systems (IPS) operate across 31 African countries, with five launched in the past year alone. Collectively, these systems processed 64 billion transactions valued at nearly $2 trillion in 2024, highlighting the continent’s rapid adoption of digital finance.
Nigeria’s Instant Payments (NIP) system became the first in Africa to achieve full inclusivity on the AfricaNenda Inclusivity Spectrum, while ten other systems have reached “progressed” levels. Beyond person-to-person (P2P) transfers, many systems now support person-to-business (P2B), government-to-person (G2P), and cross-border payments, broadening economic participation.
The State of Inclusive Instant Payment Systems (SIIPS) 2025 Report, released by the AfricaNenda Foundation in partnership with the World Bank and the United Nations Economic Commission for Africa (UNECA), underscores how IPS are driving financial inclusion, innovation, and economic opportunity across the continent. Dr. Robert Ochola, CEO of AfricaNenda, said: “Inclusive instant payments are transforming how African economies connect. SIIPS 2025 shows clear progress—more countries are adopting instant payment systems, and more people are gaining access to digital financial services that support livelihoods, trade, and growth.”
The World Bank acknowledged this progress but stressed that more work is needed, urging countries without fast payment systems to implement them and those with existing systems to enhance inclusivity, innovation, and affordability. Dr. Mactar Seck, UNECA’s Chief of Innovation and Technology, added: “Inclusion must be intentional. SIIPS 2025 provides policymakers and regulators with the evidence needed to design ecosystems that serve marginalised communities, including women, youth, the informal sector, and rural populations.” The report highlights further growth opportunities through digital public infrastructure integration, G2P payments, and cross-border interoperability.
Partnership for seamless payments
A financially stable Africa’s financial system comes with great benefits for the continent. Aside creating a larger single market, increasing intra-African trade, boosting productivity and competitiveness, a financially stable Africa will help in attracting more foreign direct investment to the continent. That explains why the Central Bank of Nigeria (CBN) and the Bank of Angola recently signed a Memorandum of Understanding (MoU) for bilateral technical cooperation.
The partnership further extends to payment, clearing and settlement systems management, financial sector development, banking supervision and regulation as well as Anti-Money Laundering and Countering the Financing of Terrorism. Cardoso, who signed on behalf of the Bank alongside the Governor of the Central Bank of Angola, Manuel Antonio Tiago Diaz, noted that the MoU aligns with Africa’s broader goals of economic integration and financial stability. Both apex bank leaders said the partnership marks a critical development between the two institutions in their efforts to deepen bilateral cooperation and technical exchange. Both institutions are by the MoU expected to establish a bilateral forum for the reciprocal exchange and sharing of technical assistance between the authorities, to enhance capacity in the execution of their respective Central Bank functions. They are also expected to cooperate and collaborate in the cross-border supervision of authorised institutions and exchange of cybersecurity information between them.
According to them, the institutions are to partner on licensing, supervision, resolution planning and implementation of resolution measures for cross-border financial establishments. They are also to ensure transparent and smooth periodic exchange of Information as well as define procedures for exchange of information. The cooperation will also extend to exchange control, financial markets and foreign reserves management, currency management and economic research.
Building stronger banks with technology
Nigeria’s banking sector is navigating one of the most pivotal moments in its history. On March 28, 2024, the CBN announced a comprehensive two-year bank recapitalisation exercise, which officially commenced on April 1, 2024. The initiative, designed to fortify the resilience of the financial system and prepare banks for a rapidly growing economy, sets new minimum capital thresholds across all banking tiers.
Under the recapitalisation plan, commercial banks with international, national and regional licences are now required to maintain minimum capital of N500 billion, N200 billion, and N50 billion, respectively. Merchant banks are expected to hold N50 billion, while non-interest banks with national and regional licenses must maintain N20 billion and N10 billion, respectively. The programme provides banks a 24-month window to comply, ending on March 31, 2026.
From the outset, the Monetary Policy Committee (MPC) of the CBN has acknowledged the stability and soundness of Nigeria’s banks. At its 303rd meeting in Abuja, the committee observed with satisfaction the sustained resilience of the banking system, noting that most financial soundness indicators remain comfortably within regulatory thresholds. The MPC also highlighted the substantial progress in the ongoing recapitalisation exercise, reporting that 16 banks have already achieved full compliance with the new capital requirements. Committee members underscored the importance of continued regulatory support to ensure a successful conclusion of the programme.
With less than four months remaining to the end of the exercise, the CBN Governor has confirmed that the recapitalisation is firmly on track. Speaking at the recent Bankers’ Dinner in Lagos, he revealed that several banks have already met the new thresholds, while others are steadily advancing and are well-positioned to meet the March 31, 2026 deadline comfortably. “To date, 27 banks have raised capital through public offers and rights issues, and sixteen have already met or exceeded the new requirements—a clear testament to the depth, resilience, and capacity of Nigeria’s banking sector,” Cardoso stated. He added that recent stress-testing further confirms that the sector remains fundamentally robust, with key financial soundness indicators overwhelmingly satisfying prudential benchmarks.
The ongoing recapitalisation underscores the importance of sound regulatory oversight and the determination of the Cardoso-led CBN to support the Federal Government’s goal of a $1 trillion Gross Domestic Product (GDP) by 2030. The Policy Advisory Council report on the national economy outlines clearly defined strategies for achieving this ambitious target, highlighting the critical role of a well-capitalised banking sector in mobilising resources, financing investment, and supporting economic expansion.
In this context, Governor Cardoso has called on banks to prepare for future rounds of recapitalisation, ensuring they maintain sufficient capital to support Nigeria’s economic ambitions. “Will Nigerian banks have sufficient capital relative to the financial system’s needs in servicing a $1 trillion economy in the near future? In my opinion, the answer is ‘No!’ unless we take action. That action is the ongoing recapitalisation, designed to prepare banks for expansion and attract big-ticket transactions that can drive economic growth,” he emphasised.
While the recapitalisation exercise continues, the CBN has reassured depositors, investors, and other stakeholders that the Nigerian banking sector remains resilient, safe, and sound. “The CBN affirms that it continues to monitor all financial institutions under its regulatory purview and maintains robust frameworks for early warning signals and risk-based supervision. These mechanisms ensure that any emerging issues are promptly addressed to protect the integrity of the financial system,” the apex bank stated. Governor Cardoso reiterated the CBN’s commitment to fostering a secure banking environment where depositors can have full confidence in the safety of their funds. The bank will continue to monitor financial institutions closely, adapt strategies as needed, and safeguard the interests of all Nigerians and stakeholders in the financial system.
As Nigerian banks meet the new capital requirements, the sector is not only strengthening its resilience but also positioning itself for a new era of growth, innovation, and participation in high-value transactions that can drive the country toward its economic goals. With recapitalisation and regulatory vigilance working hand in hand, Nigeria’s banking system is being transformed into a more robust and technologically empowered engine for national development.
What the law says
The 2007 Central Bank of Nigeria (CBN) Act charges the apex bank with a clear mandate: to promote the stability of Nigeria’s financial system. This legal foundation positions the CBN not only as a regulator but also as a guardian of public confidence in the banking sector. Through a combination of banking sector reforms, enhanced access to finance, institutional capacity building, and the enforcement of sound corporate governance practices, the CBN works to ensure that financial institutions operate safely, efficiently, and transparently.
Analysts note that maintaining stability in the financial and banking system is critical. The failure of banks or other financial institutions can erode public trust, trigger sudden contractions in money supply, reduce savings and investment, and even destabilise the payment system—all of which have direct consequences for the real economy. In response, the CBN has, over the years, implemented a series of reforms designed to strengthen the resilience and operational effectiveness of the banking sector.
Beyond safeguarding confidence, a stable financial system is essential for the effective transmission of monetary policy. When banks are sound and the financial infrastructure reliable, policy measures such as interest rate adjustments or liquidity management are more likely to achieve their intended outcomes. Stability thus underpins the CBN’s primary objective of price stability while creating a foundation for sustainable economic growth. In essence, a secure and well-regulated banking sector is not only a regulatory goal but also a critical enabler of broader macroeconomic stability in Nigeria.
