The Central Bank of Nigeria (CBN) has directed banks, fintech companies, and other licensed payment service providers to ensure that all payment transaction data generated within Nigeria is stored locally from January 1, 2027.

The directive was contained in a circular issued on Monday by the Payments System Supervision Department and addressed to deposit money banks, microfinance banks, mobile money operators, switching and processing firms, payment terminal providers, payment solution companies, super agents, and other operators in the financial technology ecosystem.

Signed by the Director of the department, Rakiya Yusuf, the circular also introduced new rules covering market structure, beneficial ownership disclosure, and systemic oversight of payment operators.

According to the CBN, the reforms were introduced in response to the rapid expansion of digital financial services and electronic payments across the country.

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

To address these issues, the apex bank mandated that all financial institutions ensure that payment transaction data generated in Nigeria are stored and managed within the country in line with applicable 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.

The requirement is expected to enhance data sovereignty, improve regulatory oversight, and keep sensitive financial information within Nigerian jurisdiction.

In addition to data localisation, the CBN also directed financial institutions to fully disclose ultimate beneficial ownership details of significant shareholders and maintain updated records available for regulatory review.

The bank said the disclosure requirement is aimed at strengthening compliance with anti-money laundering, counter-terrorism financing, and counter-proliferation financing regulations.

The apex bank further introduced competition rules to prevent excessive dominance within the payments ecosystem.

Under the new framework, any institution controlling more than 25 per cent of the card-issuing market over a 12-month period must not exceed a 15 per cent share of the merchant-acquiring market, and vice versa.

Merchant acquiring refers to processing payments on behalf of businesses, while card issuing involves providing payment cards to customers.

Operators are also required to submit monthly market share reports using specified templates, with full compliance expected by December 31, 2026.

The CBN said the measures are designed to promote transparency, reduce concentration risk, and ensure a fair and competitive payments environment.

It warned that it would monitor compliance closely and apply sanctions where necessary, adding that the reforms are part of broader efforts to strengthen Nigeria’s rapidly expanding digital financial system.