The Central Bank of Nigeria (CBN) has directed banks, fintech companies, and other payment service providers to store all payment transaction data generated within Nigeria on local servers from January 1, 2027.
The directive was contained in a circular issued by the CBN’s Payments System Supervision Department and addressed to deposit money banks, microfinance banks, mobile money operators, switching and processing companies, payment terminal service providers, payment solution service providers, super agents, and other licensed operators in the payments industry.
The circular, signed by the Director of the Payments System Supervision Department, Rakiya Yusuf, also introduced new market structure requirements, beneficial ownership disclosure rules, and systemic oversight measures for operators within the payments ecosystem.
According to the apex bank, the reforms were introduced in response to the rapid growth of electronic payments and digital financial services across Nigeria.
The CBN noted that the payments industry has witnessed significant expansion in recent years, driven by increased adoption of digital financial services and the emergence of operators with substantial market presence across key payment activities.
While acknowledging that the growth has improved innovation, operational efficiency, and financial inclusion, the regulator expressed concerns about market concentration, operational dependence, ownership transparency, and the storage of critical payments data.
To address these concerns, the central bank directed all financial institutions facilitating payments in Nigeria to ensure that transaction data generated within the country are stored and managed domestically.
The circular stated, “All Financial Institutions and participants facilitating payments within Nigeria shall ensure that payments transaction data generated within Nigeria are stored and managed in Nigeria in accordance with data protection laws and regulations applicable in Nigeria.”
The CBN added that all affected institutions must fully comply with the requirement by January 1, 2027.
The move is expected to strengthen regulatory oversight, enhance data sovereignty, and ensure that sensitive payment information remains within Nigeria’s jurisdiction.
It also aligns with a growing global trend among regulators seeking to localise critical financial data and reduce reliance on offshore infrastructure.
Beyond data localisation, the CBN introduced new beneficial ownership disclosure requirements for banks, payment service providers, and other financial institutions operating within the digital payments space.
Under the new rules, institutions are required to maintain accurate and up-to-date records of their ultimate beneficial owners and make such information available to the central bank upon request.
The regulator stated that the disclosure requirements must comply with existing anti-money laundering, counter-terrorism financing, and counter-proliferation financing regulations.
According to the CBN, the directive builds on previous efforts to improve ownership transparency and strengthen measures aimed at combating money laundering and illicit financial flows within the financial system.
The apex bank also unveiled new competition rules designed to prevent excessive market dominance in the payments industry.
Under the framework, any institution controlling more than 25 per cent of the card-issuing market over a rolling 12-month period will not be permitted to hold more than 15 per cent of the merchant-acquiring market during the same period.
Likewise, operators with more than 25 per cent market share in merchant-acquiring services will be restricted to a maximum of 15 per cent market share in card-issuing activities.
Merchant acquiring involves processing card payments on behalf of merchants, while card issuing refers to providing payment cards to customers.
The CBN further directed all regulated entities to submit monthly market share returns using prescribed reporting templates and timelines.
Affected institutions have been given until December 31, 2026, to achieve full compliance with the new market structure requirements.
According to the regulator, the measures are intended to improve transparency through beneficial ownership disclosure, reduce concentration risks, and promote a fair, competitive, and resilient payments ecosystem.
The central bank said the reforms would also help safeguard the integrity of Nigeria’s payments system while ensuring the localisation of transaction data within the country.
The CBN warned that compliance would be closely monitored and that supervisory sanctions would be imposed on institutions that fail to adhere to the new regulations.
“The CBN shall monitor compliance with the provisions of this Circular and may, where necessary, impose supervisory sanctions in accordance with applicable laws, regulations, and guidelines,” the circular stated.
The directive comes at a time when Nigeria’s digital payments industry is experiencing rapid growth, with electronic transactions reaching record levels and regulators intensifying oversight of banks, fintech firms, and payment operators to address operational, cybersecurity, and systemic risks.
