The Central Bank of Nigeria (CBN) has introduced sweeping new regulations for banks, fintech companies and other payment service providers, mandating that all payment transaction data generated within Nigeria be stored locally from January 1, 2027.
The directive was contained in a circular signed by Rakiya O. Yusuf, Director of the Payments System Supervision Department, as part of efforts to strengthen regulatory oversight, improve transparency and reduce systemic risks in Nigeria’s rapidly expanding digital payments ecosystem.
Under the new framework, all institutions involved in processing payments within Nigeria, including banks, fintech firms, mobile money operators and payment processors, must ensure that transaction data generated in the country is stored and managed on local servers in compliance with Nigerian data protection laws.
According to the apex bank, the directive follows significant changes in Nigeria’s payments landscape, driven by the rapid growth of electronic transactions, increased adoption of digital financial services and the emergence of dominant operators across key segments of the industry.
While these developments have accelerated innovation and financial inclusion, the CBN said they have also raised concerns over market concentration, ownership transparency, dependence on foreign infrastructure and the location of critical financial data.
The regulator noted that localising payment data would enhance oversight, strengthen security and ensure that sensitive financial information remains within Nigeria’s jurisdiction.
The circular stated that all affected institutions must take the necessary steps to achieve full compliance before the January 2027 deadline.
Beyond data localisation, the CBN has tightened transparency requirements for operators within the financial system.
Under the new rules, banks, fintech firms and payment service providers must disclose their Ultimate Beneficial Owners (UBOs), the individuals who ultimately own or control significant stakes in the institutions.
The regulator directed affected entities to maintain accurate and up-to-date records of beneficial ownership and make them available to the CBN whenever requested.
The measure is aimed at strengthening anti-money laundering efforts, improving corporate transparency and preventing the use of complex ownership structures to conceal control of regulated financial institutions.
Industry analysts say the move aligns with global regulatory standards designed to curb illicit financial flows and improve accountability within financial markets.
The apex bank also introduced restrictions aimed at preventing excessive concentration in the payments industry.
Under the new framework, any institution controlling more than 25 per cent of Nigeria’s card issuing market will be prohibited from holding more than 15 per cent of the merchant acquiring market during the same period.
Similarly, operators with more than 25 per cent market share in merchant acquiring services will not be allowed to control more than 15 per cent of the card issuing segment.
Merchant acquiring involves processing card payments on behalf of businesses, while card issuing relates to the distribution of debit, credit and prepaid cards to customers.
The CBN said the policy is intended to promote competition, reduce systemic risk and create a more balanced payments ecosystem.
To facilitate monitoring, all regulated institutions will be required to submit monthly market-share reports using templates prescribed by the apex bank.
Affected organisations have until December 31, 2026, to implement any structural adjustments needed to comply with the new market-share requirements.
