CBN Sets Deadline for Banks, Fintechs to Move Payment Data to Nigerian Servers

• The CBN has directed banks and fintechs to store all payment transaction data generated in Nigeria on local servers from January 1, 2027
• The new regulations also require financial institutions to disclose their ultimate beneficial owners as part of efforts to combat financial crimes
• The CBN introduced market-share limits to promote fair competition and reduce concentration risks in Nigeria’s digital payments industry

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Legit.ng journalist Victor Enengedi has over a decade's experience covering energy, MSMEs, technology, banking and the economy.

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 is stored on local servers from January 1, 2027.

The directive was announced in a circular issued by the apex bank’s Payments System Supervision Department and sent to deposit money banks, microfinance banks, mobile money operators, switching companies, payment processors, super agents, and other licensed participants in the payments industry.

Signed by the department’s director, Rakiya Yusuf, the circular introduces new regulations aimed at strengthening oversight of Nigeria’s rapidly expanding digital payments sector.

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The measures include data localisation requirements, beneficial ownership disclosures, and fresh competition rules designed to create a more transparent and resilient payment ecosystem.

According to the CBN, the reforms became necessary due to the rapid growth of electronic payments and the increasing adoption of digital financial services across the country.

Data sovereignty and regulatory oversight

The regulator noted that while the expansion of digital payments has boosted innovation, efficiency, and financial inclusion, it has also raised concerns about market concentration, operational dependencies, ownership transparency, and the management of critical payment data.

To address these concerns, the CBN mandated that all payment transaction data generated within Nigeria must be stored and managed domestically in line with the country’s data protection laws and regulations.

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 apex bank said the move would enhance regulatory oversight, strengthen data sovereignty, and ensure that sensitive financial information remains under Nigeria’s jurisdiction.

It also aligns with a growing global trend among regulators seeking to localise critical financial data and reduce dependence on foreign infrastructure.

All affected institutions are expected to comply fully with the directive by January 1, 2027.

New ownership disclosure rules

Beyond data localisation, the CBN has introduced stricter transparency requirements for financial institutions involved in payment services.

Under the new framework, banks, fintech firms, and payment operators must maintain accurate and up-to-date records of their ultimate beneficial owners and provide such information to the regulator when requested.

The disclosure requirements are expected to support existing anti-money laundering, counter-terrorism financing, and anti-proliferation financing regulations.

The central bank said the measure is part of broader efforts to curb illicit financial flows and improve accountability within the financial system.

The CBN said the reforms are intended to promote fair competition, improve transparency, reduce concentration risks, and safeguard the integrity of Nigeria’s payment system. It warned that compliance would be closely monitored and sanctions imposed on defaulting institutions.

After recapitalisation, CBN sets another tough test

Meanwhile, Legit.ng earlier reported that the CBN directed all deposit money banks to conduct comprehensive stress tests starting April 1, 2026.

The results of these tests must be submitted no later than April 30, 2026, in what analysts describe as one of the most consequential regulatory deadlines in recent years.

The directive signals a decisive shift in how Nigeria’s banking sector will be assessed, moving beyond capital size to the quality and resilience of that capital under pressure.