CBN Orders Banks, Fintechs To Store Nigerians’ Payment Data Locally By 2027, Introduces Tough New Rules To Curb Market Dominance

CBN Orders Banks, Fintechs To Store Nigerians’ Payment Data Locally By 2027, Introduces Tough New Rules To Curb Market Dominance

June 15, 2026

Nigeria's digital financial landscape is set for a major transformation as the Central Bank of Nigeria (CBN) has directed banks, fintech companies, and all payment service operators to begin storing payment transaction data generated within the country on local servers from January 1, 2027.

The directive is part of a broad regulatory overhaul aimed at strengthening oversight, protecting sensitive financial data, promoting transparency, and preventing excessive market dominance within Nigeria's rapidly expanding digital payments ecosystem.

The new policy was announced in a circular issued on Monday by the CBN's Payments System Supervision Department and signed by its Director, Rakiya Yusuf.

The circular was 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.

According to the apex bank, Nigeria's electronic payments sector has witnessed tremendous growth in recent years, driven by increasing adoption of digital financial services, technological innovation, and the emergence of powerful operators with significant market influence.

While the growth has improved financial inclusion, transaction speed, and accessibility, the CBN expressed concerns over growing market concentration, operational dependence on a few players, ownership transparency, and the storage of critical financial data outside Nigeria.

The regulator noted that urgent intervention had become necessary to safeguard the integrity and resilience of the country's financial system.

The CBN stated:

"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, have necessitated additional regulatory measures."

Under the new directive, every financial institution involved in payment transactions within Nigeria must ensure that all transaction data generated domestically is stored and managed within Nigerian territory.

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."

The CBN added that full compliance with the data localisation requirement will become mandatory from January 1, 2027.

The move is expected to strengthen Nigeria's data sovereignty, improve regulatory oversight, enhance cybersecurity protections, and reduce dependence on offshore data infrastructure.

The policy also aligns Nigeria with a growing global trend where countries are increasingly insisting that critical financial and citizen data remain within their borders.

The CBN has also tightened transparency requirements by directing banks, fintech firms, and other payment operators to disclose their ultimate beneficial owners.

Under the new rules, institutions are required to maintain accurate and updated records of individuals who ultimately own or control significant stakes in their organisations.

Such information must be made available to the CBN whenever requested.

The apex bank said this requirement must comply with existing anti-money laundering, counter-terrorism financing, and counter-proliferation financing regulations.

The measure forms part of broader efforts to combat illicit financial flows, money laundering activities, and hidden ownership structures within the financial system.

In a bid to promote fair competition and prevent monopolistic practices, the CBN introduced fresh market share restrictions for payment service operators.

Under the new framework, any institution controlling more than 25 per cent of Nigeria's card-issuing market within a rolling 12-month period will not be allowed to hold more than 15 per cent of the merchant-acquiring market during the same period.

Likewise, institutions controlling more than 25 per cent of merchant-acquiring activities will be restricted to a maximum of 15 per cent of card-issuing operations.

Merchant acquiring involves processing card payments for businesses and merchants, while card issuing refers to the provision of debit, credit, and payment cards to customers.

The CBN said all regulated institutions must submit monthly market share reports using approved templates and timelines.

Affected organisations have until December 31, 2026, to fully comply with the new market structure requirements.

The apex bank warned that it would closely monitor compliance and impose sanctions on institutions that fail to obey the new regulations.

According to the circular:

"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 latest reforms are expected to significantly reshape Nigeria's digital payments industry, which has experienced explosive growth in recent years.

For consumers, the measures could lead to stronger protection of personal financial information, improved cybersecurity, and a more competitive digital payment environment.

For banks and fintech companies, however, the new rules may require substantial investments in local data centres, compliance systems, corporate governance structures, and operational adjustments before the 2027 deadline.

As electronic transactions continue to hit record levels across the country, the CBN appears determined to ensure that innovation is balanced with security, transparency, and long-term financial stability.

Industry experts say the move marks one of the most significant regulatory interventions in Nigeria's digital finance sector in recent years and could redefine how banks and fintech companies operate going forward