The Central Bank of Nigeria has directed banks, fintech companies, and other payment service providers to ensure that all payment transaction data generated within the country are stored locally from January 1, 2027.

The directive was issued in a circular released on Monday by the Payments System Supervision Department of the Central Bank of Nigeria and addressed to a wide range of licensed operators, including deposit money banks, microfinance banks, mobile money operators, payment processors, and other players in the financial technology ecosystem.

The circular, signed by the Director of the Payments System Supervision Department, Rakiya Yusuf, also introduced new rules covering market structure, beneficial ownership disclosure, and systemic risk oversight within the payments industry.

According to the apex bank, the reforms were prompted by the rapid expansion of electronic payments and digital financial services across Nigeria.

It noted that while the growth of the sector has improved innovation, efficiency, and financial inclusion, it has also raised concerns around market concentration, ownership transparency, operational dependency, and data security.

To address these issues, the CBN mandated that all financial institutions involved in payment processing must store and manage transaction data generated in Nigeria within the country, in line with applicable data protection regulations.

“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.

Full compliance with the directive is expected to take effect from January 1, 2027.

The move is aimed at strengthening regulatory oversight, improving data sovereignty, and ensuring sensitive financial information remains under Nigeria’s jurisdiction. It also aligns with global trends where regulators are pushing for the localisation of critical financial data.

Beyond data localisation, the CBN also directed financial institutions to disclose the ultimate beneficial ownership of significant shareholders as part of enhanced transparency measures.

Institutions are required to maintain accurate and up-to-date records of their beneficial owners and provide such information to the regulator upon request, in line with anti-money laundering and counter-terrorism financing regulations.

The apex bank said the requirement is part of broader efforts to curb illicit financial flows and strengthen compliance across the financial system.

The new framework also introduces competition rules aimed at preventing excessive dominance in the payments sector.

Under the guidelines, any financial institution controlling more than 25 per cent of the card-issuing market within a 12-month period will be restricted from holding more than 15 per cent of the merchant-acquiring market, and vice versa.

Card issuing refers to the provision of payment cards to customers, while merchant acquiring involves processing payments on behalf of businesses.

All affected operators are required to submit monthly market share reports using prescribed templates, with full compliance expected by December 31, 2026.

The CBN said the reforms are designed to enhance transparency, promote fair competition, reduce concentration risks, and strengthen the resilience of Nigeria’s payments ecosystem.

It warned that compliance would be closely monitored, and sanctions would be applied where necessary.

The directive comes at a time of rapid growth in Nigeria’s digital payments industry, as electronic transactions continue to rise and regulators intensify oversight of banks, fintech firms, and payment operators to address emerging operational and cybersecurity risks.