CBN orders fintechs, banks to localise payment data, caps market dominance

The Central Bank of Nigeria (CBN) has issued a significant directive requiring all banks, fintech companies, and other payment system operators to store payment transaction data generated within Nigeria on local servers. This move is intended to bolster the security and sovereignty of financial data within the country.

In addition to the data localization requirement, the CBN has introduced measures to prevent excessive market concentration among payment service providers. These regulations aim to foster a more competitive and resilient payments ecosystem.

The new rules mandate the disclosure of beneficial ownership for all payment companies. Furthermore, a 25% threshold has been set for any single entity's market share, with a cross-market cap of 15% to prevent monopolies and encourage broader participation.

Operators in the payments sector have been given a compliance deadline of December 31, 2026, to adhere to these new regulations. This phased approach allows companies time to adjust their systems and operations to meet the CBN's requirements.