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The Central Bank of Nigeria (CBN) has directed banks, fintech companies and other payment service providers to store transaction data generated within Nigeria on local servers from January 1, 2027, as part of efforts to strengthen oversight of the country’s expanding digital payments sector.
The directive was contained in a circular issued on Monday by the Payments System Supervision Department and addressed to deposit money banks, microfinance banks, mobile money operators, switching and processing firms, payment terminal service providers, payment solution providers, super agents and other licensed operators in the payments ecosystem.
Signed by the Director of the Payments System Supervision Department, Rakiya Yusuf, the circular also introduced new rules on market structure, beneficial ownership disclosure and systemic risk monitoring across the industry.
The apex bank said the reforms were necessitated by the rapid growth of electronic payments and digital financial services in Nigeria.
It said it had observed major structural changes in the ecosystem, including increased adoption of digital payments, rising transaction volumes and the emergence of dominant players across key segments.
According to the regulator, while the expansion has improved efficiency, innovation and financial inclusion, it has also raised concerns around market concentration, operational dependence, ownership transparency and data governance.
To address these issues, the CBN mandated that all payment-related transaction data generated in Nigeria must be stored and managed locally in line with applicable data protection regulations.
The circular stated that all affected financial institutions must fully comply with the data localisation requirement by January 1, 2027.
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.”
“All affected Financial Institutions shall fully comply with this requirement effective January 1, 2027,”it added.
The policy is expected to strengthen regulatory oversight, improve data sovereignty and ensure sensitive financial information remains within the country’s jurisdiction, in line with global trends on digital data localisation.
The CBN also introduced new rules requiring financial institutions and payment operators to disclose the ultimate beneficial ownership of significant shareholders.
It directed that institutions must maintain accurate records of beneficial owners and make them available to the apex bank when requested, in compliance with anti-money laundering and counter-terrorism financing regulations.
The regulator said the measure is aimed at improving transparency and reducing illicit financial flows within the financial system.
In addition, the CBN rolled out fresh competition rules to prevent excessive dominance in the payments industry.
Under the framework, any institution controlling more than 25 per cent of the card-issuing market within a 12-month period will be restricted to a maximum of 15 per cent in the merchant-acquiring segment, and vice versa.
The bank explained that card issuing refers to the provision of payment cards to customers, while merchant acquiring involves processing payments on behalf of businesses.
All operators are required to submit monthly market share reports using approved templates, while full compliance with the market structure rules must be achieved by December 31, 2026.
The apex bank said the reforms are intended to promote transparency, reduce concentration risks and build a more competitive and resilient payments ecosystem.
It added that it would monitor compliance closely and impose sanctions where necessary in line with existing 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 latest directive follows rapid expansion in Nigeria’s digital payments sector, which has seen record transaction growth and increased regulatory attention over issues of cybersecurity, systemic risk and market stability.
