CBN Directs Banks, Fintechs to Keep Payment Data Within Nigeria
Nigeria’s apex bank is tightening its grip on the country’s booming digital payments sector. The Central Bank of Nigeria has issued a directive ordering all banks, fintech companies, mobile money operators, switching and processing firms, and other licensed payment service providers to keep Nigerian payment transaction data strictly within the country’s borders — with a compliance deadline of January 1, 2027.
The order on CBN payment data localisation was contained in a circular released Monday by the CBN’s Payments System Supervision Department and signed by its Director, Rakiya Yusuf. It applies to a sweeping list of institutions including deposit money banks, microfinance banks, payment terminal service providers, payment solution service providers, and super agents — essentially anyone operating in Nigeria’s payments pipeline.
The CBN explained that the rapid expansion of electronic payments and digital financial services had made the move necessary. While acknowledging that growth had accelerated innovation, efficiency, and financial inclusion, the regulator flagged growing concerns around market concentration, operational dependence, ownership transparency, and where critical payment data was being held.
The circular was direct: all financial institutions facilitating payments within Nigeria must ensure that payment transaction data generated in the country is stored and managed domestically, in line with Nigeria’s applicable data protection laws.
This CBN payment data localisation mandate is widely seen as a move to assert data sovereignty, strengthen regulatory oversight, and ensure that sensitive financial information does not leave Nigerian jurisdiction — a concern that has become increasingly relevant as more payment infrastructure is hosted offshore or by global technology providers.
Beyond data residency, the directive introduces new beneficial ownership disclosure requirements. Banks and payment operators will now be required to maintain up-to-date records of their ultimate beneficial owners and make that information available to the CBN on demand. The move is anchored in the country’s existing anti-money laundering and counter-terrorism financing framework.
The CBN also moved to address market dominance in the payments space. Under the new rules, any operator controlling more than 25 percent of the card-issuing market within a rolling 12-month period will be capped at 15 percent of the merchant-acquiring market in the same period — and vice versa. Institutions will also be required to submit monthly market share returns on prescribed templates. Full compliance with the market structure requirements is expected by December 31, 2026.
The apex bank was unambiguous about enforcement, warning that it would monitor compliance closely and impose supervisory sanctions where violations are found.
The directive arrives as Nigeria’s digital payments sector continues to post record transaction volumes, drawing increased regulatory scrutiny around systemic risk, cybersecurity, and the resilience of the financial infrastructure underpinning it all.
