Under a directive issued on Monday by the Payments System Supervision Department, the apex bank instructed all banks, fintech companies, mobile money operators, switching firms, payment terminal providers, and other licensed payment service participants to ensure that all transaction data generated within Nigeria is stored locally from January 1, 2027.
The circular, signed by Director Rakiya Yusuf, reflects growing regulatory concern over how rapidly the sector has evolved in recent years, driven by increased adoption of digital financial services and expanding transaction volumes.
According to the CBN, the ecosystem’s growth has brought both benefits and risks. While it has improved innovation, efficiency, and financial inclusion, it has also raised issues around market concentration, operational dependence on a few dominant players, and concerns about transparency and data control.
The bank stated that these developments made regulatory intervention necessary, noting that the industry now includes operators with significant influence across key areas of payment processing.
A key provision of the new directive mandates that all payment transaction data generated within the country must be stored and managed domestically, in line with Nigerian data protection laws.
“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,” the circular stated.
It further set a compliance deadline of January 1, 2027, giving operators time to adjust their infrastructure and data systems to meet the requirement.
The move is widely seen as part of a broader push for data sovereignty, ensuring sensitive financial information remains within Nigerian jurisdiction while reducing dependence on offshore servers and external cloud infrastructure.
Beyond data localisation, the CBN also introduced stricter rules on ownership disclosure, requiring financial institutions to identify and maintain accurate records of their ultimate beneficial owners. These records must be made available to the regulator on demand and comply with anti-money laundering and counter-terrorism financing standards.
The bank said this step is intended to strengthen transparency in the sector and reduce risks associated with hidden ownership structures and illicit financial flows.
In addition, the regulator unveiled new competition rules designed to prevent excessive dominance within the payments industry. Under the framework, institutions controlling more than 25 per cent of either card issuance or merchant acquiring markets will face restrictions limiting their presence in the other segment to 15 per cent.
The CBN explained that the rule is aimed at reducing concentration risk and encouraging a more balanced and competitive ecosystem. Operators will also be required to submit monthly reports detailing their market share positions.
Institutions have until December 31, 2026, to fully comply with the new market structure requirements.
The apex bank said the reforms are intended to “improve transparency through beneficial ownership disclosure, address concentration risk, promote a fair, competitive, and resilient payments ecosystem,” while also safeguarding the integrity of Nigeria’s financial system.
It warned that compliance will be closely monitored and that sanctions may be imposed where necessary.
“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,” the statement added.
The latest policy direction comes at a time when Nigeria’s digital payments sector continues to expand rapidly, with electronic transactions hitting record levels and regulators increasing oversight to manage risks linked to cybersecurity, operational resilience, and systemic stability.