THE Central Bank of Nigeria (CBN) has reiterated its commitment to the new regulatory measures requiring payment service providers, banks and other financial institutions to store payment transaction data within Nigeria and disclose their ultimate beneficial owners as part of efforts to strengthen oversight of the country’s rapidly expanding digital payments ecosystem.

In a circular titled: “Introduction of Market Structure Requirements, Data Localisation, Ultimate Beneficial Ownership Disclosure and Systemic Oversight Measures in the Nigeria Payments System”, the apex bank said the new rules are aimed at improving transparency, reducing concentration risks and safeguarding the integrity of the nation’s payment system.

The directive follows what the CBN described as significant structural changes in the Nigerian payments landscape, driven by rapid growth in electronic transactions, increasing adoption of digital financial services and the emergence of operators with substantial market influence.

According to the regulator, while these developments have enhanced innovation, efficiency and financial inclusion, they have also created concerns around market concentration, operational dependence, ownership transparency, systemic importance and the location of critical payment data.

Under the new framework, all Deposit Money Banks (DMBs), Payment Service Providers (PSPs) and other financial institutions with digital payment operations must disclose the Ultimate Beneficial Ownership (UBO) of significant shareholders in line with existing Anti-Money Laundering, Combating the Financing of Terrorism and Counter-Proliferation Financing regulations.

The institutions are also required to maintain accurate and up-to-date records of their beneficial owners and make such information available to the CBN whenever requested.

In a statement signed by the Director of the Payments System Supervision Department, Dr Rakiya O. Mohammed, the apex bank further directed that all payment transaction data generated within Nigeria must be stored and managed locally in compliance with applicable data protection laws.

The data localisation requirement will take effect from January 1, 2027, giving affected institutions time to align their infrastructure and operational processes with the new rules.

The circular also introduces market structure requirements aimed at curbing excessive concentration in the payments industry.

Under the guidelines, any licensed financial institution controlling more than 25 percent market share in card issuing activities within a rolling 12-month period will not be permitted to hold more than 15 percent market share in merchant acquiring activities during the same period.

Similarly, institutions with more than 25 percent market share in merchant acquiring will be restricted to a maximum of 15 percent market share in card issuing operations.

To facilitate monitoring, all regulated entities are required to submit monthly market share returns using templates prescribed by the CBN.

Affected institutions must comply fully with the market structure requirements by December 31, 2026.

The apex bank warned that it will closely monitor compliance and impose supervisory sanctions where necessary, in line with applicable laws, regulations and guidelines.

Industry analysts say the measures are expected to enhance transparency, strengthen consumer data protection, reduce systemic risks and promote fair competition in Nigeria’s fast-growing digital payments sector.

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