The Central Bank of Nigeria has issued a directive requiring major payment service providers, including OPay and Moniepoint, to separate their payment processing and switching businesses by the end of 2026. The order, which also affects other prominent fintechs, mandates the divestment or establishment of distinct legal entities for these operations, a move the regulator says is aimed at strengthening oversight of the country's digital payments market.

According to the directive, published on June 17, 2026, companies that currently combine payment processing with switching services must either sell off one of the operations or create a separate subsidiary. The CBN stated the measure is designed to enhance transparency, mitigate systemic risk, and prevent conflicts of interest within the rapidly expanding digital payments ecosystem, which is estimated to be worth approximately $40 billion.

In a parallel regulatory tightening, the central bank has also ordered all payment service providers to localise their transaction data within Nigeria. This new data governance rule requires that domestic payments data be stored and processed exclusively within the country, a policy intended to give regulators greater visibility and control over financial flows. Analysts view this as part of a broader effort by the CBN to assert more direct authority over a sector that has grown rapidly with limited traditional banking infrastructure.

The regulatory actions come amid intensifying competition in Nigeria's point-of-sale terminal market, where fintechs have aggressively expanded their networks. The CBN's new rules are seen as a significant intervention that could reshape the operational landscape for these companies, potentially increasing compliance costs and altering their business models. Industry observers note that the separation of switching and processing could limit the scale advantages some of the larger integrated players currently enjoy.

While the immediate focus is on Nigeria, the developments reflect a wider trend of regulatory scrutiny across African fintech markets as authorities seek to balance innovation with financial stability. In other regions, partnerships continue to drive expansion, such as the collaboration between payments giant Interswitch and Tropical Bank Uganda to broaden access to banking services. Meanwhile, in Ghana, Affinity Bank's CEO has argued that the underlying economics of the banking system still favour cash transactions, highlighting the varied stages of digital finance adoption across the continent.

The CBN has not specified penalties for non-compliance but has set a clear deadline for the operational restructuring. The affected fintech companies, which have been instrumental in driving financial inclusion through mobile and agency banking services, are now required to submit their plans for compliance to the regulator for approval. The coming months will likely see significant corporate restructuring within Nigeria's fintech sector as companies adapt to the new regulatory framework.