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🇳🇬 Nigeria /Economy & Trade

CBN orders banks, fintechs to store payment data locally

From The Punch · () English

Summarized and contextualized by DistantNews.

At a glance

News Official statement New plan
  • The Central Bank of Nigeria (CBN) has mandated that all payment transaction data generated within the country must be stored on local servers starting January 1, 2027.
  • This directive applies to banks, fintech firms, and other payment service providers as part of new measures to enhance oversight of the digital payments sector.
  • The CBN aims to strengthen regulatory oversight, improve data sovereignty, and address concerns about market concentration and ownership transparency in the rapidly expanding digital payments ecosystem.

The Central Bank of Nigeria (CBN) is enforcing new regulations requiring all payment transaction data generated within the country to be stored locally. Effective January 1, 2027, banks, fintech firms, and other payment service providers must house this critical data on Nigerian servers.

This directive, detailed in a circular from the Payments System Supervision Department, aims to bolster oversight of Nigeria's rapidly growing digital payments sector. The CBN noted significant structural developments, including rapid growth in electronic payments and the emergence of dominant operators. While this expansion has fostered innovation and financial inclusion, it has also raised concerns regarding market concentration, operational dependence, and transparency in ownership.

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.

— Rakiya YusufDirector of the Payments System Supervision Department, CBN, outlining the core data localization requirement.

To counter these issues, the CBN is implementing broader reforms. These include new market structure rules, mandatory disclosure of beneficial ownership for significant shareholders, and enhanced systemic oversight measures. The data localization requirement is a key component, intended to strengthen regulatory oversight, ensure data sovereignty, and keep sensitive payment information within Nigeria's jurisdiction. This aligns with global trends of financial regulators seeking to localize critical data and reduce reliance on offshore infrastructure.

The circular mandates that all financial institutions facilitating payments in Nigeria must comply with the data storage requirement in accordance with Nigerian data protection laws. Institutions are also required to maintain accurate records of their ultimate beneficial owners and provide this information to the CBN upon request. These measures collectively seek to create a more robust and transparent digital financial ecosystem.

All affected Financial Institutions shall fully comply with this requirement effective January 1, 2027.

— Rakiya YusufDirector of the Payments System Supervision Department, CBN, specifying the compliance deadline.
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Originally published by The Punch. Summarized and contextualized by our editorial team with added local perspective. Read our editorial standards.

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