CBN Orders Banks, Fintechs to Store Nigerian Payment Data Locally by 2027

The Central Bank of Nigeria has directed banks, fintech companies, mobile money operators and other payment service providers to keep all payment transaction data generated in Nigeria on local servers.

The directive will take effect on January 1, 2027. It forms part of the CBN’s wider effort to tighten oversight, improve transparency and reduce risks in Nigeria’s fast-expanding digital payments industry.

The apex bank also introduced the Nigerian Overnight Financing Rate, known as NOFR, as a new benchmark designed to improve transparency in loan pricing and strengthen the link between monetary policy decisions and actual lending rates in the banking sector.

New Rule Targets Payment Data Localisation

In a circular signed by Rakiya O. Yusuf, Director of the Payments System Supervision Department, the CBN said all financial institutions and payment system participants that process transactions in Nigeria must store and manage payment data within the country.

The regulator said the rule aligns with Nigeria’s data protection laws and will help keep sensitive financial information under Nigerian jurisdiction.

The policy affects deposit money banks, fintech firms, mobile money operators, payment processors and other digital finance companies. Many of these firms currently rely partly on foreign cloud systems or offshore data infrastructure to support their operations.

According to the CBN, the rapid growth of electronic payments and digital financial services has changed the structure of Nigeria’s financial system. While this growth has supported innovation and financial inclusion, it has also created new regulatory concerns.

The apex bank pointed to market concentration, ownership transparency, operational dependence on external infrastructure and the location of critical payment data as key areas requiring stronger supervision.

Why the CBN Is Tightening Payment Oversight

Nigeria’s digital payments sector has grown rapidly in recent years. More Nigerians now use mobile transfers, cards, payment apps, agency banking and online platforms for daily transactions.

This growth has created major opportunities for banks and fintech companies. It has also made the payment system more critical to the economy.

The CBN said it wants to protect the integrity of the financial system by ensuring that important transaction records remain accessible to regulators and protected under Nigerian law.

The directive also signals a more assertive regulatory approach toward fintechs and other digital payment operators. As more companies gain scale, the CBN wants stronger visibility into who owns them, how they operate and where they keep sensitive data.

Banks and Fintechs Must Disclose Beneficial Owners

The CBN also directed affected institutions to disclose their Ultimate Beneficial Ownership structure.

This means banks, payment service providers and other financial institutions must identify the individuals or entities that ultimately own or control significant shares in their operations.

The regulator said institutions must keep accurate and updated ownership records. They must also make those records available to the CBN whenever required.

This measure is aimed at improving transparency and supporting Nigeria’s fight against money laundering, illicit financial flows and terrorism financing.

It also targets complex ownership structures that may hide the real controllers of regulated financial companies.

CBN Moves Against Excessive Market Concentration

The circular also introduces new controls to prevent excessive dominance in key parts of the payment industry.

Under the framework, any financial institution that controls more than 25 per cent of the card issuing market within a rolling 12-month period will not be allowed to hold more than 15 per cent of the merchant acquiring market during the same period.

This rule is designed to reduce concentration risk and prevent a few major players from dominating multiple payment segments at once.

For the CBN, a more balanced payment ecosystem will support competition, resilience and consumer protection.

NOFR Launched to Improve Loan Pricing

Alongside the payment data directive, the CBN launched the Nigerian Overnight Financing Rate in Abuja.

CBN Governor Olayemi Cardoso described NOFR as a major reform that would help build a more credible, transparent and efficient financial market.

The benchmark is expected to improve monetary policy transmission. In simple terms, it should help ensure that decisions taken by the CBN’s Monetary Policy Committee reflect more clearly in market interest rates and bank lending costs.

At present, changes in the Monetary Policy Rate do not always translate quickly into the interest rates charged by banks. This gap weakens the impact of monetary policy on inflation, credit and broader economic activity.

With NOFR, the CBN wants to create a stronger link between policy decisions, money market conditions, banks’ funding costs and lending rates.

Cardoso said the reform is important because the CBN needs a more effective transmission mechanism to deliver on its price stability mandate.

Nigeria Aligns With Global Benchmark Reform

NOFR is a transaction-based overnight secured interbank financing rate. It reflects the actual cost of overnight funding in Nigeria’s money market.

Unlike older benchmark structures that rely heavily on submissions or estimates, NOFR is built around real market transactions. This makes it more transparent and harder to manipulate.

The CBN developed the benchmark with the Financial Markets Dealers Association and technical support from the European Bank for Reconstruction and Development.

Cardoso said the shift aligns Nigeria with global best practice in benchmark rate reform. Financial markets across the world have moved toward transaction-based benchmarks after concerns about manipulation in older reference rate systems.

The CBN expects NOFR to improve price discovery, deepen financial markets and build investor confidence.

What NOFR Means for Businesses and Bank Customers

NOFR may not immediately reduce bank lending rates. However, it should make loan pricing more transparent over time.

For businesses and households, the benchmark could help clarify how banks determine borrowing costs. It could also create a more credible reference point for pricing wholesale deposits, financial contracts, securities and future market products.

The CBN said NOFR will support treasury operations, liquidity management and risk management across the financial system.

It will also lay the foundation for future term benchmark rates, derivatives and structured financial products.

This is important for Nigeria’s ambition to deepen its capital markets and attract stronger domestic and foreign investment.

Stakeholders Urged to Adopt New Benchmark

Cardoso said the success of NOFR will depend on broad acceptance across the financial system. He urged banks, dealers, regulators, market infrastructure providers and other stakeholders to integrate the benchmark into their operations.

Deputy Governor for Economic Policy, Philip Ikeazor, described the launch as an important milestone in the development of Nigeria’s financial markets.

He said the reform represents progress, modernisation and a commitment to building a stronger financial system.

Access Bank’s Managing Director, Roosevelt Ogbonna, represented by the bank’s Treasurer, David Enilolobo, also welcomed the benchmark. He said NOFR gives the market a reference rate based on what actually happened in transactions, not what market participants believe should have happened.

A Stronger Push for Financial Transparency

The CBN’s latest actions show a clear regulatory direction. The apex bank wants more local control over payment data, better disclosure of ownership structures, less concentration in key payment segments and more credible market pricing.

For banks and fintechs, the January 2027 deadline means they must review their data storage systems, compliance structures and ownership reporting processes.

For the wider economy, the reforms could improve confidence in Nigeria’s financial system if implemented effectively.

The coming months will test how quickly banks, fintechs and payment operators can adapt to the new rules. But the message from the CBN is clear: Nigeria’s digital finance ecosystem must grow with stronger transparency, better governance and deeper regulatory oversight.