The Central Bank of Nigeria’s (CBN) new rule on payment data management, including localisation, ownership disclosure and capping as well as sundry related issues, is set to stretch the capacity of operators of the payment ecosystem in the coming months, a challenge many have already described as a potential nightmare.

Whereas some may have built sufficient capacity to scale to meet the new demand, there are indications that the majority would need a significant system overhaul to be ready for the transition into the new era, which takes effect on January 1, 2027.

With the wide supply gap in the technology high-end skills, a problem worsened by the steep increase in immigration by middle-class professionals in recent years, there are fears that many banks would find the right professionals needed to manage the transition.

But some analysts already see the operators resorting to the importation option as data localisation is considered a high-expertise service.

On Monday, the CBN directed banks, fintechs and other payment service providers to store all payment transaction data generated in Nigeria within the country, effective January 1, 2027, as part of new measures to strengthen oversight of the payments ecosystem.

The apex bank also ordered financial institutions with digital payment operations to disclose the ultimate beneficial ownership (UBO) of significant shareholders and maintain up-to-date ownership records that could be made available to regulators on request.

The directives were contained in a circular issued to deposit money banks (DMBs), microfinance banks (MFBs), mobile money operators (MMOs), switching and processing companies, payment terminal service providers (PTSPs), payment solution service providers (PSSPs), super agents and other licensed operators.

According to the CBN, the Nigerian payments industry has witnessed rapid growth in electronic transactions and digital financial services, leading to the emergence of operators with significant influence across key payment activities.

While the growth has improved innovation, efficiency and financial inclusion, the regulator said it has also created concerns around market concentration, operational dependence, systemic importance, ownership transparency and the location of critical payment data.

“The circular further aims to safeguard the integrity of the Nigerian payments system and ensure the localisation of payment transaction data within Nigeria,” the bank stated.

To address transparency concerns, the CBN directed all banks, payment service providers and other financial institutions with digital payment footprints to disclose the beneficial owners of significant shareholdings in line with existing anti-money laundering and counter-terrorism financing regulations.

The regulator also introduced new market structure rules designed to prevent excessive dominance in both consumer issuing and merchant acquiring businesses.

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

Likewise, institutions with more than 25 per cent market share in merchant acquiring activities will be restricted to a maximum of 15 per cent share in consumer issuing operations.

The CBN said all regulated entities must submit monthly market share returns based on prescribed templates and timelines, while affected institutions have until December 31, 2026, to comply with the new market structure requirements.

The apex bank warned that compliance with the circular would be closely monitored and that supervisory sanctions may be imposed where necessary in line with existing laws, regulations and guidelines.