Nigeria’s central bank has ordered banks, fintech firms and other payment service providers to store all payment transaction data generated within the country on local servers from January 1, 2027, as part of new measures aimed at strengthening oversight of the rapidly growing digital payments sector.
The directive, issued by the Central Bank of Nigeria (CBN), forms part of a broader regulatory framework targeting data sovereignty, market concentration and transparency in ownership structures within the financial services industry.
In a circular signed by Rakiya Yusuf, Director of the CBN’s Payments System Supervision Department, the regulator said the reforms were necessary following significant expansion in electronic payments and digital financial services across Africa’s largest economy.
“The Nigerian payments ecosystem has witnessed rapid growth in electronic payments, increasing adoption of digital financial services, and the emergence of operators with substantial market presence across key payment activities,” the central bank said.
According to the directive, all financial institutions facilitating payments within Nigeria must ensure that transaction data generated in the country is stored and managed locally in compliance with Nigerian data protection laws.
“All affected financial institutions shall fully comply with this requirement effective January 1, 2027,” the circular stated.
The central bank said the move would enhance regulatory oversight, strengthen data sovereignty and ensure that sensitive financial information remains within Nigeria’s jurisdiction.
The policy aligns with a growing global trend among regulators seeking greater control over critical financial data and reducing reliance on overseas data infrastructure.
Beyond data localisation, the CBN introduced stricter ownership disclosure requirements for financial institutions operating within the payments ecosystem.
Banks, fintech companies and other payment service providers will now be required to maintain accurate and updated records of their ultimate beneficial owners and provide such information to regulators upon request.
The measure is expected to reinforce anti-money laundering, counter-terrorism financing and anti-proliferation financing efforts by improving transparency in corporate ownership structures.
The regulator also unveiled competition rules aimed at preventing excessive market dominance by individual operators.
Under the new framework, any institution controlling more than 25 percent of Nigeria’s card-issuing market over a rolling 12-month period will be restricted from holding more than 15 percent of the merchant-acquiring market.
Similarly, firms with more than 25 percent market share in merchant-acquiring services will be limited to a maximum of 15 percent of the card-issuing market.
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Merchant-acquiring services enable businesses to accept card payments, while card issuing involves providing payment cards to consumers.
The CBN said the measures are intended to address concentration risks and promote a more competitive and resilient payments landscape.
As part of the reforms, regulated entities must submit monthly market-share reports using templates approved by the central bank.
Institutions have until December 31, 2026, to comply with the new market structure requirements before full enforcement begins.
“The measures are designed to improve transparency through beneficial ownership disclosure, address concentration risk, promote a fair, competitive and resilient payments ecosystem,” the regulator said.
The central bank added that compliance would be closely monitored and warned that institutions failing to meet the new requirements could face supervisory sanctions under existing financial regulations.
Nigeria is home to one of Africa’s fastest-growing fintech sectors, with digital payments playing an increasingly important role in financial inclusion and economic activity.
