Nigeria Proposes ₦500 Million Fine for Illegal Payment Data Transfers in New Digital Security Bill

Nigeria’s financial technology industry could face significant regulatory changes as lawmakers consider legislation introducing tougher penalties for the unauthorised transfer of sensitive payment data outside the country.

A bill before the House of Representatives proposes a minimum fine of ₦500 million, a prison sentence of up to 10 years, or both, for individuals found guilty of transferring strategic payment transaction data abroad without regulatory approval.

The proposed legislation also seeks to establish a National Payment Data Protection and Sovereignty Commission, which would oversee the protection and management of Nigeria’s payment information infrastructure.

Financial institutions that fail to meet the proposed domestic data-hosting requirements could face fines starting at ₦1 billion.

What This Means for Banks and Fintech Companies

If enacted, the legislation could significantly influence how Nigerian banks, fintech startups and payment service providers manage customer transactions.

Many digital financial services depend on cloud infrastructure and international technology partnerships. New data-localisation requirements could increase compliance costs and require changes to existing infrastructure.

At the same time, supporters may view the proposal as an opportunity to strengthen cybersecurity, improve regulatory oversight and expand investment in domestic data infrastructure.

Balancing Innovation and Data Security

The success of any new framework will depend on how effectively regulators balance national data protection objectives with the operational needs of financial institutions.

The Bigger Picture

As Nigeria’s digital economy expands, protecting financial information is becoming increasingly important. However, the legislation remains a proposal and has not yet become law.

Its final provisions could have major implications for the future of digital payments, financial innovation and cross-border financial services.