Nigeria Tightens Fintech Oversight
The CBN's new licensing framework signals a maturing regulatory environment for digital financial services.
## What's New
The Central Bank of Nigeria has unveiled a comprehensive licensing framework for payment service providers, requiring all fintechs processing above N100 million monthly to obtain enhanced operating licenses by Q3 2025.
Why It Matters
Nigeria's fintech sector—the continent's largest with $1.2B in funding since 2019—has operated in a regulatory gray zone. This framework brings clarity but raises the barrier to entry significantly. Smaller players may need to consolidate or exit.
The Details
The new framework introduces three license tiers:
- **Tier 1 (Basic PSP)**: For transactions under N100M monthly. Minimum capital: N50M.
- **Tier 2 (Standard PSP)**: N100M-1B monthly volume. Minimum capital: N500M.
- **Tier 3 (Super PSP)**: Above N1B monthly. Minimum capital: N3B, plus mandatory data localization.
Key compliance deadlines: - March 2025: Submit preliminary applications - June 2025: Complete security audits - September 2025: Full compliance required
Who's Affected
The framework impacts an estimated 200+ licensed and unlicensed payment companies. Major players like Flutterwave and Paystack (Stripe) should transition smoothly. Mid-tier operators face the toughest decisions—comply at significant cost or seek acquisition.
Go Deeper
Industry groups are pushing for extended timelines. The Fintech Association of Nigeria meets with CBN officials next week. We'll cover the outcome.
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