Six-Month Data Localisation Deadline Too Short, Risks Payment Disruptions; Banks Warn CBN

Reloaded News Desk

Nigerian banks and other payment industry operators have warned that the Central Bank of Nigeria’s six-month deadline for full payment-data localisation is too short, calling for a phased implementation to prevent disruptions across the country’s digital payments system.

The CBN requires banks, fintech companies, payment service providers and other regulated participants to ensure that payment transaction data generated in Nigeria is stored and managed within the country by January 1, 2027.

The directive, issued in June, is part of the regulator’s broader effort to strengthen data sovereignty, regulatory oversight and resilience within Nigeria’s rapidly expanding payments ecosystem.

But industry stakeholders say the scale of the migration makes the deadline difficult to meet safely.

Speaking at the GrowthX forum in Lagos, FCMB Chief Technology Officer Blessing Ehize said banks needed clearer guidance from the CBN on exactly which data must be hosted locally and what could continue operating through hybrid-cloud arrangements.

Ehize said the Committee of Bank CIOs had struggled to obtain sufficient clarity on implementation requirements, arguing that the industry needed a detailed roadmap rather than an abrupt migration deadline.

Hakeem Adeniji-Adele, Deputy Managing Director of eTranzact, also described the six-month window as too short given the volume of data that would have to be moved.

He called for a phased approach in which computing and storage capacity could be migrated progressively rather than requiring all operators to move simultaneously.

Payment disruption is the central concern

The concern goes beyond the cost of moving data.

Nigeria’s payment infrastructure processes enormous volumes of transactions every day, meaning poorly executed migration could affect banks, fintechs, payment processors and ultimately consumers.

Industry stakeholders have warned that institutions could be pushed into hurried compliance exercises instead of carefully testing new infrastructure, cybersecurity controls, disaster-recovery systems and failover arrangements.

The debate is therefore becoming a question of how Nigeria can achieve data sovereignty without weakening the resilience of the financial system.

Local capacity exists, but execution remains the challenge

The concerns do not necessarily mean Nigeria lacks the infrastructure to host the data.

Industry executives have previously said Nigeria has sufficient data-centre capacity to support the migration, although specialised technical skills, power reliability, fibre infrastructure, cybersecurity and the cost of moving large workloads remain concerns.

Commercial data centres have available capacity, with additional capacity capable of being fitted out as demand increases.

The bigger challenge, according to industry operators, is executing large-scale migrations without creating new operational vulnerabilities.

Banks that already operate sophisticated cloud environments must consider data replication, backup systems, disaster recovery, cybersecurity monitoring and continuity of payment services during the transition.

CBN’s objective

The CBN’s June directive followed concerns about the rapid expansion of electronic payments, operational dependence, market concentration and the storage of critical payment information outside Nigeria.

Under the rule, financial institutions and payment participants must ensure that payment transaction data generated in Nigeria is stored and managed locally in accordance with applicable data-protection laws.

The regulator also introduced requirements covering beneficial ownership disclosures and market structure within payment services.

The policy effectively places payment data within Nigeria’s regulatory jurisdiction and reduces dependence on offshore infrastructure for critical financial information.

The January deadline

With January 1, 2027 approaching, the industry is now pressing for greater regulatory clarity and a structured implementation timetable.

The argument from stakeholders is not that payment data should remain offshore indefinitely.

Rather, they want the transition managed in stages so that institutions can migrate, test and secure their systems without putting the country’s increasingly digital financial system at unnecessary risk.

For the CBN, the challenge is now balancing two objectives; bringing critical payment data under Nigerian control while ensuring that the process of doing so does not undermine the stability of the payment system it is intended to protect.

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