The Central Bank of Nigeria (CBN) has directed banks, fintech firms and other
payment service providers to store payment transaction data generated within
the country on local servers from January 1, 2027, as part of new measures to
strengthen oversight of the fast-growing digital payments ecosystem.
The directive was contained in a circular issued by the Payments System
Supervision Department of the CBN on Monday and addressed to deposit
money banks, microfinance banks, mobile money operators, switching and
processing companies, payment terminal service providers, payment solution
service providers, super agents and other licensed operators in the payments
industry.
The circular, signed by the Director of the Payments System Supervision
Department, Rakiya Yusuf, also introduced new market structure rules,
beneficial ownership disclosure requirements and systemic oversight measures
for payment service operators.
According to the apex monetary authority, the reforms became necessary
following the rapid expansion of electronic payments and digital financial
services across the country.
The CBN said it had 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.”
It noted that while the growth had improved innovation, efficiency and financial
inclusion, it had also created concerns around market concentration, operational
dependence, ownership transparency and the storage of critical payments data.
To address these concerns, the regulator ordered all financial institutions
facilitating payments in Nigeria to ensure that transaction data generated within
the country are stored domestically.
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 move is expected to strengthen
regulatory oversight, enhance data sovereignty and ensure that sensitive
payment information remains within Nigeria’s jurisdiction.
It also aligns with broader efforts by regulators globally to localise critical
financial data and reduce reliance on offshore infrastructure. Beyond data
localisation, the CBN ordered banks, payment service providers and other
financial institutions with digital payment operations to disclose the ultimate
beneficial ownership of significant shareholders.
According to the circular, institutions must maintain accurate and up-to-date
records of their ultimate beneficial owners and make such information available
to the apex bank upon request.
The regulator said the disclosure requirement must comply with existing anti-
money laundering, counter-terrorism financing and counter-proliferation
financing regulations.
The directive builds on previous CBN efforts to strengthen beneficial ownership
transparency as part of wider measures to combat money laundering and illicit
financial flows in the financial system.