Nigeria’s financial services industry is heading for a regulatory shift as the Central Bank of Nigeria (CBN) moves to tighten oversight of payment operations, data management, and market competition across the sector.
In a new directive issued to banks, payment service providers (PSPs), and other financial institutions involved in digital payment activities, the apex bank has mandated that all payment transaction data generated within Nigeria must be stored and managed inside the country.
The policy, contained in a circular signed by Rakiya Yusuf, director of the CBN’s Payments System Supervision Department, is scheduled to take effect on January 1, 2027.
According to the regulator, institutions facilitating payment transactions in Nigeria must ensure that locally generated data remain within the country’s borders and are handled in accordance with applicable data protection laws. The move is expected to strengthen regulatory visibility over payment ecosystems while reinforcing compliance with Nigeria’s evolving data governance framework.
Beyond data localisation, the CBN has also introduced fresh ownership transparency requirements aimed at strengthening anti-money laundering and counter-terrorism financing safeguards.
Under the new framework, banks, PSPs, and other financial institutions with digital payment operations are required to disclose the ultimate beneficial ownership (UBO) of significant shareholders. The institutions must keep ownership records accurate and up to date and provide such information to the regulator whenever requested.
The central bank further directed regulated entities to submit monthly market share returns using prescribed templates and timelines, a measure designed to enhance monitoring of competition and concentration levels within the payment industry.
Affected institutions have been given until December 31, 2026, to fully align with the new market structure requirements.
The regulator warned that compliance will be closely monitored and that supervisory sanctions could be imposed where institutions fail to meet the stipulated obligations, in line with existing laws, regulations, and guidelines.
The latest directive comes amid a broader effort by the CBN to reshape competition within Nigeria’s payment landscape.
Recently, the apex bank introduced restrictions on market dominance among financial institutions participating in card issuing and merchant acquiring businesses. Under those rules, any institution controlling more than 25 percent of the card issuing market will be limited to a maximum of 15 percent share in the merchant acquiring segment.
Likewise, financial institutions holding more than 25 percent of the merchant acquiring market will be restricted to a 15 percent share in card issuing operations.
Taken together,.the measures signal a more interventionist regulatory approach by the CBN, combining data sovereignty requirements, ownership transparency, and market concentration controls as it seeks to strengthen the integrity, competitiveness, and oversight of Nigeria’s rapidly expanding digital payments sector.
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