CBN pushes cross-border payment reforms for MSMEs growth
admin
As the country deepens financial reforms, the Central Bank of Nigeria is championing cross-border payment modernisation to unlock growth, competitiveness, and inclusion for Micro, Small, and Medium Enterprises nationwide, ARINZE NWAFOR writes
The Governor of the Central Bank of Nigeria, Olayemi Cardoso, has advocated coordinated reforms in cross-border digital payments as a catalyst for inclusive growth, stronger financial stability, and deeper global financial integration across developing economies.
For the CBN governor, efficient and reliable payment systems are fundamental to economic inclusion. However, he stressed that building systems capable of attracting broad participation requires tackling persistent challenges such as high remittance charges, prolonged settlement timelines, fragmented infrastructure, and heavy compliance obligations. According to him, reforms within the financial system are designed to eliminate these bottlenecks and deliver a seamless, efficient payment ecosystem that benefits households, businesses, and institutions alike.
The future of electronic payments in developing countries, he argued, depends largely on how reforms and integration within the financial services sector are structured and implemented.
For Nigeria and other emerging markets, he noted, progress demands policies that stimulate investment, encourage innovation, and provide safeguards that enable financial institutions to manage cross-border payments efficiently and securely. Such a balanced policy mix, he explained, strengthens domestic economies and attracts capital flows that ultimately enhance citizens’ digital payment experiences.
It was against this backdrop that Cardoso called for intensified and well-coordinated reforms in digital cross-border payments to achieve sustainable growth and enduring stability within the financial system.
Call for action
Speaking at the recent G-24 Technical Group Meetings in Abuja, Cardoso reiterated that efficient payment systems are indispensable to economic inclusion. He observed that excessive remittance costs, delayed settlements, disconnected payment systems, and stringent compliance requirements continue to limit the participation of households and Micro, Small, and Medium Enterprises in global commerce.
He pointed out that average costs in global remittance corridors remain above six per cent, with transactions often taking several days to settle. These constraints, he said, effectively exclude millions from participating fully in modern economic activity.
While acknowledging the enormous potential of digital payments, Cardoso cautioned that the rapid evolution of financial technology also presents risks. Among them, he listed currency substitution, weakened monetary policy transmission, heightened foreign exchange volatility, pressures from capital flows, and regulatory fragmentation.
On Nigeria’s domestic reforms, he stated: “We have strengthened our Anti-Money Laundering and Countering the Financing of Terrorism frameworks in line with Financial Action Task Force guidelines, requiring strict dual-screening of cross-border transactions to mitigate risks”.
He added that in pursuit of deeper regional integration, the CBN had simplified Know Your Customer and AML requirements for low-value cross-border payments. The objective, he explained, is to encourage wider participation in the Pan-African Payment and Settlement System, reduce bureaucratic friction for Nigerian SMEs, and accelerate intra-African trade transactions.
“We have also embraced fintech innovation through our Regulatory Sandbox, allowing payment-focused fintechs to test secure, instant cross-border solutions under close CBN supervision. Nigeria’s commitment to working with G-24 members, the IMF, the World Bank Group, and other partners to build a more inclusive, resilient, and development-oriented global financial architecture,” he said.
The G-24 Technical Group Meeting 2026, themed “Mobilising finance for sustainable, inclusive, and job-rich transformation,” brought together global financial stakeholders to advance reforms aimed at modernising finance in emerging and developing economies.
Nigeria’s FATF delisting
A significant development reinforcing Nigeria’s reform trajectory was its recent removal from the grey list of the Financial Action Task Force, the global body responsible for combating money laundering and terrorist financing.
Reacting to the decision, Cardoso said, “The FATF’s decision to remove Nigeria from the grey list is a strong affirmation of our reform trajectory and the growing integrity of our financial system. It reflects a clear policy direction and the coordinated efforts of key national institutions working together to deliver sustainable, standards-based reforms. Our priority now is to consolidate these gains, ensuring that compliance, innovation, and trust continue to advance hand in hand to reinforce financial stability and strengthen Nigeria’s global credibility.”
The FATF spearheads international efforts to tackle money laundering, terrorist financing, and proliferation financing. The 40-member organisation, supported by institutions such as the World Bank Group and the International Monetary Fund, sets standards that empower national authorities to track and curb illicit funds linked to drug trafficking, illegal arms trade, cyber fraud, and other serious crimes.
For Nigeria, exiting the grey list opens broader opportunities within global financial markets. The Paris-based watchdog’s decision marks significant progress in restoring investor confidence, lowering the cost of capital, and enhancing the credibility of the country’s financial system.
Other countries recently removed from the list include South Africa, Mozambique, and Burkina Faso. According to the FATF, “As of February 2025, the FATF has reviewed 139 countries and jurisdictions and publicly identified 114 of them. Of these, 86 have since made the necessary reforms to address their AML/CFT weaknesses and have been removed from the process.”
The body identifies jurisdictions with serious strategic deficiencies in combating money laundering, terrorist financing, and proliferation financing. It stated, “For all countries identified as high-risk, the FATF calls on all members and urges all jurisdictions to apply enhanced due diligence, and in the most serious cases, countries are called upon to apply counter-measures to protect the international financial system from the ongoing money laundering, terrorist financing, and proliferation financing risks emanating from the country.”
By addressing gaps in regulatory oversight and strengthening enforcement against illicit financial flows, the affected nations satisfied FATF conditions for delisting, improving their reputations among international financial institutions and investors. Nigeria and South Africa were placed on the list in February 2023, Mozambique in October 2022, and Burkina Faso in February 2021.
President of the Association of Bureaux De Change Operators of Nigeria, Dr Aminu Gwadabe, welcomed the development, saying, “The recent announcement of the Financial Action Task Force on the exit of Nigeria from its grey list, known as the dirty money list, shows Nigeria’s commitment to achieving the 40 FATF recommendations. The move has tremendously induced confidence and removed tension in the financial market”.
Modernising the payments
Cardoso disclosed that Nigeria’s digital finance transformation gathered pace in 2025, reflecting twin priorities of encouraging innovation while preserving stability within the payments ecosystem.
Earlier in the year, the CBN extended its Payment System Vision roadmap to 2028, underlining its commitment to modernising payment infrastructure and reinforcing cybersecurity frameworks.
“More than 12 million contactless payment cards are now in circulation. Our regulatory sandbox has expanded to over 40 fintech innovators, enabling safe experimentation and responsible scaling of new digital-finance solutions,” he said.
Updated agent-banking guidelines have also tightened anti-money-laundering safeguards, including geo-fencing of high-risk areas, while enhancing consumer protection at the grassroots level. Improved integration among switching companies has advanced Nigeria’s journey toward seamless domestic interoperability.
As a result of these initiatives, Nigeria ranks among Africa’s most advanced digital payments markets. Its vibrant fintech ecosystem has produced eight of the continent’s nine unicorns. By mid-2025, leading fintech applications had each recorded over 10 million downloads, with one surpassing 50 million downloads, reflecting widespread consumer acceptance.
On emerging technologies such as digital assets, tokenisation, and stablecoins, Cardoso said the CBN’s approach would remain measured and deliberate. Innovation, he emphasised, must be pursued responsibly and anchored firmly in consumer protection and financial stability.
The apex bank, he added, will continue to conduct monetary policy with discipline, maintaining a clear focus on price stability as its primary mandate.
“Stability remains the bedrock upon which investment flourishes, resources are allocated efficiently, and purchasing power is protected. In 2026, we will deepen engagement with stakeholders, strengthen collaboration with other regulators and international partners, and foster responsible innovation across the financial system,” Cardoso said.
“We will continue to provide forward guidance, protect the integrity of our financial markets, leverage technology and AI to improve decision-making, and build institutional capacity to support an evolving and resilient financial system,” he stated.
He affirmed that by remaining disciplined, forward-looking, and consistent with its mandate, the CBN would help ensure Nigeria’s economy remains stable, inclusive, and positioned for sustainable growth.
Fintech for development
Cardoso said he had witnessed firsthand the transformative impact of digital finance in expanding economic participation, creating jobs, and improving livelihoods. Consequently, the CBN is determined to capitalise on Nigeria’s unique opportunity to harness fintech innovation for national development.
“Nigeria is undergoing a rapid and significant financial evolution. Over the past decade, our nation’s fintech landscape has grown from a handful of startups into one of Africa’s most vibrant innovation ecosystems. Even amid global economic headwinds, Nigerian fintech firms continued to attract investment and drive change,” he said.
With improved currency and macroeconomic stability, he noted, the potential for financial innovation to scale inclusion is more evident than ever.
“This report reflects the Central Bank’s commitment to fostering a thriving fintech landscape while safeguarding the stability of our financial system. It is the product of extensive engagement between regulators and industry stakeholders. By surveying fintech operators, financial institutions, and policymakers, we have gathered candid insights on what is working, what is not, and where we can do better.
“The findings illuminate both our progress and the gaps we must address, from modernising regulatory frameworks and payments infrastructure to supporting startups in reaching Nigeria’s unbanked communities. The report is careful to contextualise Nigeria’s fintech journey within global trends, reminding us that we are part of a rapidly evolving digital finance landscape that offers immense opportunities as well as new risks,” he stated.
Reaffirming the apex bank’s position, Cardoso added, “We are committed to creating an environment where new ideas can flourish under prudent oversight, and where inclusion is at the heart of our endeavours. Fintech must help deliver financial services to the last mile of our population, from the bustling cities to the rural villages, so that no Nigerian is left behind in the digital economy.”
The CBN defines financial technology, or fintech, as the application of innovative digital tools to deliver financial services across diverse segments, including digital payments, remittances, lending platforms, crowdfunding, insurance technology (InsurTech), investment and wealth management technology (WealthTech), and regulatory technology (RegTech).
As digital platforms continue to reshape how individuals transfer money, obtain credit, and interact with financial institutions, Nigeria has emerged both as a continental leader and a proving ground.
In 2024, Nigerian startups secured over $520m in equity funding from a continental total of $2.2bn, ranking among Africa’s leading ecosystems by capital raised and deal volume. This trend builds on earlier momentum: in 2019, Nigerian tech startups attracted about $747m, representing roughly 37 per cent of Africa’s total startup funding that year.
Despite global macroeconomic volatility, Nigeria has maintained its status as a hub for financial innovation. However, the ecosystem’s reliance on foreign capital exposes it to fluctuations in global financial markets, underscoring the need for sustained domestic reforms and resilient policy frameworks.
