Nigeria Orders Banks, Fintechs to Store Transaction Data Locally
The Central Bank of Nigeria (CBN) has issued a directive requiring all financial institutions and payment operators to store customer transaction data on local servers by January 1, 2027. This move aims to strengthen regulatory oversight and enhance the resilience of Nigeria’s digital payments ecosystem.
The new rule applies to deposit money banks, microfinance institutions, mobile money operators, switching companies, payment processors, and other licensed payment providers. The CBN stated that compliance with data protection laws is mandatory and will be actively monitored with appropriate sanctions for violations.
Market Structure Changes
In addition to the data localization requirement, the CBN introduced market structure rules limiting any single institution’s share in card issuing or merchant acquiring activities to 25%. Companies exceeding this threshold will face restrictions on holding more than 15% in the other activity by December 31, 2026.
The CBN explained these measures address concentration risks and promote a fairer payments landscape. With digital payment adoption rapidly expanding, some operators have become dominant across multiple key activities, raising structural concerns.
Compliance Challenges Ahead
Industry experts note that Nigeria’s data center infrastructure may need to scale significantly to accommodate this new demand. While larger institutions with existing technology frameworks can manage the transition within the given timeframe, smaller fintech companies and payment solution providers could face greater challenges.
The costs of compliance include:
- Capital expenditure for local storage capacity
- Operational expenses for management and security
- Transition risks associated with migrating live data without service disruption
These requirements follow similar moves by regulators in other African markets like Kenya, reflecting a broader trend towards greater data sovereignty and regulatory control over digital financial services.