The Central Bank of Nigeria (CBN) has directed banks, fintech companies and other payment service providers to keep all payment transaction data generated within the country on local servers from January 1, 2027.

The directive forms part of new regulatory measures introduced by the apex bank to strengthen oversight of Nigeria’s rapidly expanding digital payments sector.

The instruction was contained in a circular issued recently by the CBN’s Payments System Supervision Department and sent to deposit money banks, microfinance banks, mobile money operators, switching and processing firms, payment terminal service providers, payment solution service providers, super agents and other licensed payment operators.

Signed by the Director of the Payments System Supervision Department, Rakiya Yusuf, the circular also unveiled fresh rules on market structure, beneficial ownership disclosure and systemic supervision within the payments industry.

The apex bank said the measures were introduced in response to the continued growth of electronic payment channels and digital financial services across Nigeria.

According to the CBN, it has observed “significant structural developments within the Nigerian Payments ecosystem, characterised by rapid growth in electronic payments, increasing adoption of digital financial services, and the emergence of operators with substantial market presence across key payment activities.”

While acknowledging that the growth has boosted innovation, efficiency and financial inclusion, the regulator said it has also raised concerns relating to market concentration, operational reliance, ownership transparency and the handling of critical payment data.

As part of efforts to address those concerns, the CBN mandated all financial institutions involved in payment transactions within Nigeria to ensure that such data is stored and managed locally.

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.”

It added that “all affected Financial Institutions shall fully comply with this requirement effective January 1, 2027.”

The CBN said the policy is expected to improve regulatory supervision, strengthen data sovereignty and keep sensitive payment information within the country’s jurisdiction.

The initiative also mirrors a growing global trend among regulators seeking to localise critical financial data and reduce dependence on offshore infrastructure.

The circular further requires banks, payment service providers and other financial institutions engaged in digital payment services to disclose the ultimate beneficial owners of significant shareholdings.

Under the new requirement, affected institutions must maintain accurate and updated records of their ultimate beneficial owners and provide the information to the CBN whenever requested.

The regulator noted that compliance with the disclosure requirement must align with existing anti-money laundering, counter-terrorism financing and counter-proliferation financing regulations.

The move reinforces previous efforts by the apex bank to improve transparency in ownership structures and curb money laundering as well as other illicit financial activities within the financial sector.

In addition, the CBN introduced new competition measures aimed at preventing excessive dominance by any operator in the payments ecosystem.

The framework stipulates that any financial institution controlling more than 25 per cent of the card-issuing market over a rolling 12-month period will be restricted from holding more than 15 per cent of the merchant-acquiring market within the same period.

Likewise, operators with over 25 per cent market share in merchant-acquiring activities will be limited to a maximum of 15 per cent market share in card-issuing operations.

Merchant acquiring involves processing card payments for merchants, while card issuing refers to the provision of payment cards to customers.

The CBN also directed all regulated entities to submit monthly market share reports using approved templates and timelines.

Affected institutions were instructed to put necessary measures in place and achieve full compliance with the market structure requirements on or before December 31, 2026.

According to the apex bank, the measures are designed to “improve transparency through beneficial ownership disclosure, address concentration risk, promote a fair, competitive, and resilient payments ecosystem.”

The regulator added that the reforms are intended to “safeguard the integrity of the Nigerian payments system and ensure the localisation of payments transaction data within Nigeria.”

The CBN warned that compliance with the directive would be closely monitored and that sanctions could be imposed on defaulting institutions.

“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.”

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