The Central Bank of Nigeria has directed all banks, fintech companies, and payment service providers to store payment transaction data generated within Nigeria on local servers, with a compliance deadline of January 1, 2027. The directive is part of a broader regulatory framework that also introduces new market structure rules and beneficial ownership disclosure requirements for operators across the country’s digital payments ecosystem.
What the Circular Says
The CBN issued the circular on June 15, 2026, titled “Introduction of Market Structure Requirements, Data Localisation, Ultimate Beneficial Ownership Disclosure, and Systemic Oversight Measures in the Nigerian Payments System.” It was signed by the Director of the Payments System Supervision Department, Rakiya O. Yusuf.
The directive addresses 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 CBN’s language in the circular is unambiguous: all financial institutions and payment system participants facilitating transactions in Nigeria must ensure that payment transaction data generated within the country is stored and managed locally in compliance with Nigerian data protection laws and regulations.
Why the CBN Is Doing This
The apex bank said the new measures were introduced following significant structural changes in Nigeria’s payments landscape, driven by rapid growth in electronic transactions, increased adoption of digital financial services, and the emergence of dominant players in key payment activities.
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 broader efforts by regulators globally to localise critical financial data and reduce reliance on offshore infrastructure.
New Rules on Market Dominance
Beyond data localisation, the circular introduces rules designed to prevent excessive concentration in the payments market. Under the framework, any licensed financial institution that controls more than 25 per cent of the card-issuing market within 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.
The CBN cited rapid growth in electronic payments and concerns around market concentration and operational dependence as key drivers of the new measures. The dual-cap rule signals the regulator’s intent to break up the structural dominance that a handful of large players have built across multiple segments of the payment chain.
Ownership Transparency Required
The circular also mandates ultimate beneficial ownership disclosures. The CBN ordered banks, payment service providers, and other financial institutions with digital payment operations to disclose the ultimate beneficial ownership of significant shareholders. Institutions are expected to maintain accurate and up-to-date ownership records and make them available to the CBN on request.
What It Means for the Industry
For the industry, the January 1, 2027, deadline marks a clear regulatory milestone that could reshape how payment infrastructure is designed, where critical financial data is hosted, and how institutions prepare for an increasingly data-driven digital economy.
Nigeria’s digital payments market has grown rapidly over the past several years, with fintechs and banks processing billions of naira in electronic transactions daily. The CBN’s latest intervention reflects a regulator moving to bring that growth under tighter sovereign control, asserting that data generated in Nigeria should stay in Nigeria.
