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

The directive is contained in a circular issued by the CBN’s Payments System Supervision Department and signed by its Director, Mrs. Rakiya O. Yusuf. The circular is titled: “Introduction of Market Structure Requirements, Data Localisation, Ultimate Beneficial Ownership Disclosure, and Systemic Oversight Measures in the Nigeria Payments System.”

According to the apex bank, all financial institutions and participants facilitating payments within Nigeria must ensure that payment transaction data generated in the country are stored and managed within Nigeria in compliance with applicable data protection laws and regulations. The CBN stated that all affected institutions are expected to achieve full compliance with the directive by January 1, 2027.

The bank explained that the new requirement became necessary following the rapid growth of electronic payments, increased adoption of digital financial services and the emergence of operators with substantial market presence across key payment activities in the Nigerian payments ecosystem.

It noted that while the expansion of digital payments has improved innovation, efficiency and financial inclusion, it has also raised concerns regarding market concentration, operational dependence, ownership transparency and the storage of critical payment data outside Nigeria.

The CBN said the localisation policy is aimed at strengthening regulatory oversight, enhancing data sovereignty, improving cybersecurity and ensuring that sensitive payment information remains within Nigeria’s jurisdiction.

In addition to the data localisation requirement, the circular also introduced new measures on market structure and ownership transparency. Financial institutions and payment service providers are now required to maintain accurate and up-to-date records of their Ultimate Beneficial Owners (UBOs) and make such information available to the CBN upon request.

The apex bank also announced measures aimed at preventing excessive concentration within the payments industry by imposing market share limits across key payment activities and strengthening systemic oversight of major operators.

Industry observers believe the directive could stimulate fresh investments in Nigeria’s data centre industry as banks, fintechs and payment processors move to comply with the new requirements before the January 2027 deadline.