Inside CBN’s New Payment Rules: What Banks & Fintechs Must Do Before 2027

CBN Moves to Reshape Nigeria’s Digital Payments Ecosystem

THE Central Bank of Nigeria (CBN) has unveiled a far-reaching regulatory framework that will require banks, fintech firms and other payment service providers to store payment transaction data generated within Nigeria on local servers from 1st January 2027.

The directive marks one of the most significant regulatory interventions in Nigeria’s rapidly expanding digital payments industry, reflecting growing concerns around data sovereignty, financial security and market concentration.

Beyond data localisation, the framework introduces stricter ownership disclosure requirements, competition safeguards and enhanced reporting obligations designed to strengthen oversight of the country’s financial technology ecosystem.

As digital transactions continue to expand across banking, e-commerce and mobile payment platforms, the new measures signal a broader effort by regulators to ensure that the infrastructure supporting Nigeria’s digital economy remains transparent, secure and resilient.

Data Localisation Takes Centre Stage

At the heart of the new framework is a requirement that all payment transaction data generated within Nigeria must be stored and managed domestically.

The CBN argues that keeping payment data within national borders will enhance regulatory supervision, improve data security and strengthen Nigeria’s control over sensitive financial information.

Industry analysts note that data localisation has become an increasingly important issue globally as governments seek greater oversight of digital financial systems and protection of critical national data assets.

Under the directive, institutions will have until 1st January 2027, to fully comply with the localisation requirement.

Wide Range of Financial Institutions Affected

The new rules extend beyond traditional commercial banks.

Affected institutions include:

• Deposit money banks
• Microfinance banks
• Mobile money operators
• Payment solution service providers
• Payment terminal service providers
• Switching and processing companies
• Super agents
• Other licensed payment operators

The broad scope of the directive reflects the increasingly interconnected nature of Nigeria’s payments ecosystem, where banks and fintech firms jointly facilitate millions of transactions daily.

Experts believe the inclusive approach is intended to prevent regulatory gaps and ensure uniform compliance standards across the industry.

Ownership Transparency Under Fresh Scrutiny

A key feature of the framework is the requirement for financial institutions and payment operators to maintain accurate records of their ultimate beneficial owners.

Beneficial ownership refers to the individuals who ultimately control or profit from a company, even when ownership structures involve multiple entities or intermediaries.

The move aligns with global efforts to combat financial crimes, including money laundering, terrorism financing and illicit financial flows.

Regulators believe greater transparency in corporate ownership will strengthen accountability and improve confidence in the financial system.

CBN Targets Market Concentration

The framework also introduces measures designed to prevent excessive market dominance by any single operator.

Under the new rules, firms controlling more than 25 per cent of the card-issuing market will be restricted from holding more than 15 per cent of the merchant-acquiring market.

Similarly, operators with dominant positions in merchant-acquiring services will face corresponding limits in card issuance activities.

The CBN says these provisions are aimed at promoting competition, reducing systemic risks and encouraging a more balanced marketplace.

Industry observers note that such measures could reshape competitive dynamics within Nigeria’s growing fintech and payments sector.

Monthly Reporting Requirements Introduced

To improve regulatory monitoring, affected institutions will be required to submit periodic market share reports to the apex bank.

The reports will enable regulators to track market developments, identify concentration risks and assess compliance with competition requirements.

The enhanced reporting framework is expected to provide regulators with more timely insights into industry trends and operational activities.

Compliance Deadlines and Enforcement Measures

The CBN has established clear implementation timelines for the reforms.

While market structure requirements must be fully implemented by 31st December 2026, payment data localisation obligations will take effect from 1st January 2027.

The regulator has warned that institutions failing to comply may face sanctions under existing banking and financial services regulations.

These penalties could include supervisory actions and other enforcement measures deemed appropriate by the apex bank.

What the Reforms Mean for the Industry

The new framework underscores the CBN’s determination to build a more transparent, competitive and secure digital payments environment.

For financial institutions, compliance may require substantial investments in local data infrastructure, governance systems and reporting mechanisms.

For regulators, the reforms offer stronger oversight capabilities in an industry that has become increasingly central to Nigeria’s economic transformation.

As digital payments continue to gain momentum nationwide, the success of the framework may ultimately depend on how effectively institutions adapt to the new regulatory landscape while maintaining innovation and customer confidence.