Importance of Payment Infrastructure in Africa

#Africa bleeds $5B a year not to #corruption or #mismanagement, but just to move money within its own borders. Example: A Kenyan business paying a Ugandan supplier. Instead of Nairobi → Kampala, money goes: Nairobi → USD conversion (1–2%). USD routed via New York/London ($20–50 fee). USD → Ugandan shillings (another 1–2%). By the time a $26,000 invoice is paid, $500–1,000 is gone. Whilst we may be denied visas, our money travels freely through New York. And it’s not just trade: Africa’s #diaspora sends $95B home each year, yet pays the world’s highest remittance costs. -We pay the highest cost for credit. -We pay the highest cost for payments. -We pay the highest cost to send our own money home. It’s not inefficiency. It’s design. The #GlobalFinancialSystem wasn’t built for us. The good news? Solutions exist. #PAPSS (Pan-African Payment and Settlement System) is already live linking 15 central banks, 150 commercial banks, and 14 payment switches, with the capacity to handle $300B in intra-African trade annually. Through PAPSS, that same Kenya–Uganda  transaction could  look very different: -One direct conversion from KES → UGX (0.2–0.5% spread). -Settlement netted via African central banks. -Funds received in hours, not days. Estimated cost: $60–150.  Potential savings: $500–950 on a single $26,000 payment. No detours. Value stays in Africa. The challenge isn’t invention. It’s implementation. One Africa. One market. One #payment system. AI image below*

Africa quietly processed 64 billion instant payment transactions worth nearly 2 trillion dollars in 2024. That is not a fintech headline. That is economic infrastructure hiding in plain sight. This week on the Unlocking Africa Podcast, I sat down with Sabine F. Mensah, Deputy CEO of AfricaNenda Foundation and co-author of the State of Inclusive Instant Payment Systems in Africa 2025 report, one of the most comprehensive studies ever produced on Africa’s real time payments ecosystem. What stood out most in this conversation was how clearly it reframed payments, not as a niche fintech topic, but as core economic infrastructure driving trade, productivity, and inclusion. As Sabine explained… “Digital payments mean more people are accessing and using digital payments and leveraging them to contribute to productive activities that can drive the economy.” Drawing on insights from 31 countries, we explored why Nigeria has emerged as Africa’s first fully mature instant payment system, and why this success was not accidental. In Sabine’s words… “It is not just about speed. It is about who is included and how systems are designed from day one.” We discussed: • Why scale alone does not guarantee inclusion • How interoperability transforms SME cash flow and liquidity • Why instant payments are foundational to AfCFTA success • How real time settlement changes growth outcomes for African businesses • Why trust, consumer protection, and recourse mechanisms matter as much as infrastructure One line that stayed with me throughout the episode… “There is no trade without payment. Digital payments are as important as ports and customs.” And a reminder that inclusion is deeply human... “It is not just one consumer with a bad experience. It is my family, my village, my community.” This episode is essential listening for policymakers, investors, founders, and anyone serious about doing business in Africa. Payment systems are no longer background infrastructure. They are central to growth. ⬇️ Listen now, link in the comments below ⬇️ #AfCFTA #DigitalPublicInfrastructure #PaymentsInfrastructure #AfricaTrade #InclusiveGrowth #Podcast

The Infrastructure Mismatch Africa is now a $3.3 trillion economy. That number alone should end every lazy “frontier market” conversation quickly But here’s what this GDP map doesn’t show: ◾️ $1.43 trillion flowed through mobile money wallets across the continent in 2025; yet 75% of registered accounts sit inactive every month ◾️ Cross-border payments between African nations still cost 7–20% of transaction value and take 3–5 days to clear The GDP is real but the financial infrastructure underneath it is not keeping pace Look beyond the big 3️⃣ ➖ South Africa, Egypt, and Nigeria account for 35% of the continent’s output but what’s more interesting is the tier forming beneath them which includes the likes of - Kenya at $141B, Ethiopia at $126B, Ghana and Côte d’Ivoire both above $110B, Tanzania approaching $100B. Five or more economies have crossed the $100B threshold in the last cycle alone The above isn’t a “rising Africa” narrative, it’s a structural shift that demands a different question: who builds the financial rails for a continent where GDP is scaling faster than the payment systems, identity infrastructure, and cross-border settlement mechanisms required to capture the value? PAPSS is connecting 160+ banks for local-currency cross-border settlement & AfCFTA’s Digital Trade Protocol is laying regulatory groundwork but 350m adults remain fully unbanked, and 90% of transactions are still in cash The continent doesn’t have a growth problem, it has a plumbing problem and the institutions or fintechs that solve it won’t just serve a market, they’ll define one #Africa #Fintech #Payments

Africa's Payment Revolution: The Numbers That Change Everything This map reveals something extraordinary about African markets that most foreign companies completely miss. Look at the real-time payment volumes: -Nigeria: 5.1 billion transactions -Kenya: 12 billion transactions -South Africa: 200 million transactions The Hidden Reality: While foreign companies worry about "payment infrastructure" in Africa, Africans are conducting billions of real-time transactions annually. Kenya alone processes more real-time payments than Germany (4.1B), U.K. (4B), or Japan (1.8M). What This Means for Foreign Companies: -The old assumption: "Africans don't have banking infrastructure" -The new reality: Africans have leap-frogged traditional banking entirely Business implications: -Mobile money penetration exceeds traditional banking -Instant payment capabilities in markets you thought were "cash-only" -Digital commerce infrastructure more advanced than many European markets -Consumer behavior optimized for real-time transactions The Opportunity Gap: After 100+ projects across 24 African countries, I see foreign companies still building payment strategies around assumptions from 2010. Meanwhile, African consumers expect: -Instant mobile payments -Real-time transaction confirmations -Seamless cross-border transfers -Digital-first commerce experiences Real Examples: -Mistake: European retailer insisting on cash-only operations in Kenya -Reality: Lost 60% of potential customers who only transact via M-Pesa -Success: Asian e-commerce platform integrating mobile money first -Result: 300% faster market penetration than competitors The Strategic Question: Are you building your African expansion around your payment preferences, or your customers' payment reality? The Competitive Advantage: Companies that understand Africa's real-time payment ecosystem don't just enter markets faster, they capture market share from competitors still stuck in cash-based thinking. The data doesn't lie: Africa isn't waiting for payment infrastructure. Africa IS the payment infrastructure innovation. Your move. #AfricaPayments #MobileMoney #DigitalCommerce #FinTech #MarketEntry #MrExportToAfrica

A nurse in Oslo just sent €500 home to Nigeria. €50 disappeared before her family saw a single cent. This isn’t a bug in the system. This IS the system. Africa moves $100B+ in remittances annually on infrastructure designed for a different era. SWIFT networks built for corporate millions, not family hundreds. Correspondent banks stacking fees like Jenga towers. Forex spreads buried in fine print. The math is brutal: 8 to 12% vanishes in transit. Three to five days in limbo. Zero transparency on where it goes. Meanwhile, a teenager in Kigali can send stablecoins to Accra in 11 seconds for pennies. The infrastructure mismatch isn’t technical. It’s economic. Traditional rails were built to extract, not serve. They work for high value corporate flows between established banking systems. They struggle with the high volume, low value cross border flows that African families depend on. But something’s shifting. Currency volatility is driving USD demand across the continent. Stablecoin rails have achieved institutional credibility. Governments are exploring compliant alternatives. The technology is ready. The rails are going to be rebuilt. The question is whether they serve families or intermediaries. I know which side I’m on…

To increase merchant acceptance of digital payments in Sub-Saharan Africa, payment systems must be redesigned to fit the realities of micro and small businesses. This includes restructuring merchant fees—such as tiered pricing with free transactions up to certain thresholds—and simplifying onboarding and verification processes. Additionally, digital payment providers should offer more value than just transaction convenience by including tools for payroll, supplier payments, and cash flow management - making digital payments a business enabler rather than just a cost. Current digital payment models impose prohibitive costs and operational frictions on merchants, who typically operate with thin margins and informal structures. High fees, complex processes, and concerns about tax scrutiny make cash a more attractive option.  As a result, only 20% of adults in Sub-Saharan Africa made a digital merchant payment in 2024! Addressing these barriers can unlock the vast potential of Africa’s merchant sector, supporting economic growth, poverty reduction, and financial inclusion (by bringing more people and businesses into the formal financial system). It would enable more efficient, transparent, and innovative economic activity across the continent. Read more at: https://lnkd.in/dzybd838 by Rashmi Pillai, Natalie Baatjies, Xavier Faz.

Very comprehensive and latest report on Africa cross border payment If you don’t have time to read it all, here is the summary: 🔹 Market Outlook • $329B market (2025) projected to hit $1 trillion by 2035, growing at a 12% CAGR. • Despite growth, the system is plagued by inefficiencies—high fees, currency volatility, and fragmented regulations. ⸻ 🔹 Key Drivers • Mobile money dominance: 781M accounts (2022), handling 66% of global mobile money volumes. • Digital innovation: Fintechs and APIs reduced fees to ~3.5% vs banks’ 8–12%. • Intra-African trade and regional migration are boosting demand for digital cross-border payments. ⸻ 🔹 Challenges • High costs: Africa has the highest remittance fees globally (7.4–8.3% avg). • Fragmented FX landscape: 40+ currencies, often requiring costly USD/EUR conversions. • Limited eKYC: Only 55% of African nations permit electronic onboarding. • Liquidity constraints: $5B lost annually due to poor FX liquidity and double conversions. • Heavy reliance on SWIFT and correspondent banks slows down transactions. ⸻ 🔹 Emerging Solutions • PAPSS (Pan-African Payment and Settlement System) enables instant cross-border local-currency payments. • Crypto & stablecoins: Potential to cut remittance fees by 60% and enable faster settlements. • Fintech disruptors: Chipper Cash, Flutterwave, Bitnob, and others bypass traditional banks. • API and blockchain-based platforms are improving interoperability and FX pricing. ⸻ 🔹 Regional Highlights • West Africa: $48B in 2022; dominated by Nigeria, Ghana. High informal flows. • East Africa: Mobile money-led; 60%+ digital; M-Pesa and MTN MoMo. • Southern Africa: Bank-led; high fees (12–15%); South Africa sends $17B. • North Africa: Led by Egypt ($32B); EU and Gulf diaspora dominate inflows. • Central Africa: Low infrastructure, over 70% of flows are informal. ⸻ 🔹 User Segments • Migrants: Send $200–$500 monthly. • SMEs/traders: Use mobile money for $1K–$10K transactions. • Corporates: Payroll and supply chain payments > $50K. ⸻ 🔹 Strategic Recommendations For Investors: • Focus on infrastructure gaps (FX, PAPSS, API layers). • Bet on high-frequency, low-cost transaction platforms. For Founders: • Prioritize SME trade finance and embedded finance. • Build interoperable, mobile money-integrated products. For Policymakers: • Harmonize regulations and KYC. • Promote stablecoin/blockchain experimentation. • Enforce PAPSS integration across banks. #africa #remittance #financialinclusion #payments

Africa’s Cross-Border Payments Are at a Turning Point — But Can Digital Fix the “Last Mile”? Africa’s $200+ billion* annual cross-border payments market is growing fast, but cost, speed, and transparency gaps still hold it back. Citi’s latest research shows that digital rails — from ISO 20022 to regional schemes like PAPSS — could change the game. The question: will the ecosystem move together, or build new silos? ⸻ THEMES • Speed & Transparency Are Now Baseline Expectations — Swift GPI and ISO 20022 adoption are giving banks and corporates package-tracking-style visibility on payments. • Regulators Are Raising the Stakes — Multiple central banks are piloting instant cross-border settlement models to reduce reliance on USD/EUR corridors. • Fintechs Are Closing Merchant Gaps — Players like Yoco are targeting SMEs with POS, e-commerce, and reconciliation tools to smooth the last mile. VARIATIONS • PAPSS in West Africa enables real-time settlement in local currencies — but adoption remains uneven. • Southern Africa still leans on legacy correspondent models, with higher friction and cost. • BRICS Pay pilots could bypass traditional rails entirely, but risk fragmentation if not interoperable. IMPLICATIONS • Banks risk losing corporate flows to fintechs if they don’t match speed and user experience. • Regional rails will only succeed if they integrate seamlessly with global systems. • Digital assets (stablecoins, CBDCs) offer potential cost savings but will stall without clear regulatory alignment. WHAT’S NEXT The future hinges on ecosystem orchestration, not just tech. To truly modernise, Africa’s cross-border payments must combine: 1. Common data standards (ISO 20022 end-to-end) 2. Interoperable domestic and regional scheme 3. Regulatory frameworks that enable innovation without silos ⸻ The real disruptor isn’t a single new rail — it’s multi-rail intelligence that routes payments dynamically for cost, speed, and compliance, in real time. Opinions: my own. Source: Citi, “Cross-Border Payments in Africa” #payments #africa #iso20022 #digitalpayments

SARB just became a 50% Owner of BankservAfrica. South African Reserve Bank (SARB) has taken a major stake in BankservAfrica. And Bankserv has now rebranded as PayInc SA. But who are they? They're the core engine behind SA’s payment systems. Think of BankservAfrica as the national railway for digital payments – it handles everything from card transactions and EFTs to real-time platforms like PayShap SA. Now, with SARB acquiring them, SARB isn’t just the regulator, they'll also be the co-owner and modernizer of that railway. It's like the government is making sure the train goes to underserved towns (the unbanked), and the train keeps "running" smoothly. 🔁 But why is SARB stepping in? Interoperability: They want to ensure all payment systems – old and new – can work together seamlessly. Inclusion: They want to extend affordable digital payment access to underserved communities, "the unbanked". Innovation: They want to accelerate the shift from cash to digital, supporting initiatives like instant settlements and lower transaction costs. And this follows a trend seen in emerging markets like India (UPI) and Brazil (Pix), where central bank-led payment modernisation dramatically increased financial inclusion and reduced reliance on cash. But this also theoretically means faster, cheaper, and safer transactions for everyone – from street vendors accepting QR payments to businesses settling invoices in real time. SARB’s move signals that payments are now critical national infrastructure. And when central banks invests directly, change tends to happen faster. But will this actually increase financial inclusion in South Africa? Will this make a difference? #SARB #BankservAfrica #Payments #DigitalTransformation #FinancialInclusion #Fintech #SouthAfrica —— I'm Elly - a data analyst in banking. If you liked this, you'll like my free newsletter THE BANKING BRIEF: 5 Minute banking and fintech news.

Something interesting in our industry is how differently innovation is defined depending on the infrastructure it starts from. Innovation is not always the same as progress. A product can be innovative while still relying on the old underlying rails. The existing infrastructure often dictates how innovation unfolds and the environment it operates within. In Europe, the payments evolution has taken place within a mature ecosystem and regulatory environment. That has anchored progress around interoperability, consumer protection, and systemic stability. In the US, cards and platforms have been dominant distribution layers. A lot of visible innovation has happened on top of existing rails, while the core infrastructure has evolved more slowly by comparison Africa sits in a different position. There, innovation was less about improving traditional banking infrastructure and more about working around its limits. Mobile money is a good example. It emerged out of necessity. Limited bank branches, constrained access to formal ID, large informal economies, vast rural populations. That produced a different kind of innovation, one that prioritised: 🔘 Access 🔘 Distribution 🔘 Trust through agents rather than institutions 🔘 Usability over formal standards The mobile phone became the financial infrastructure. As these systems mature, the focus naturally shifts. Scale brings new questions around interoperability, standards, and cross-border integration. There were some insightful updates shared at the nexo standards conference last year on that front. Mobile money is NOT a niche solution. ◾ More than 2.1 billion mobile money accounts are registered globally, with over 1 billion active users ◾ Africa accounts for roughly 66% of global mobile money value ◾ Over 178 mobile money services operate across the continent, out of around 336 worldwide This is not incremental change. It is a structural shift in how financial services are accessed, delivered, and used. Essentially, the same themes debated in EU and the US, but approached from a very different starting point. In that context, standardisation is approached as a way to: ◾ Allow wallets, banks, fintechs, and governments to interoperate ◾ Reduce fragmentation without undermining inclusion ◾ Create shared languages for trust, data, and settlement ◾ Connect local innovation to regional and global payment rails So innovation is truly contextual. It generally reflects the constraints, incentives, and infrastructure of its environment. And sometimes, the models that travel furthest are born not from abundance, but from absence. #paymentinfographics #card #paymentstrategy #acquiring #payprwork #mobilemoney Merchant Hub Merchant Hub: Merchant Voice, Amplified! Paypr.work [ˈpeɪpəwəːk] #nexostandards #paymentacceptance #standards Jacques Santiago Ana Mylene Jacqueline Gary ---- 𝘓𝘦𝘵’𝘴 𝘵𝘢𝘭𝘬 𝘱𝘢𝘺𝘮𝘦𝘯𝘵 𝘴𝘵𝘳𝘢𝘵𝘦𝘨𝘺. 👉 intro@paypr.work 👉 www.paypr.work