Cross-Border Payments in Africa Continue to Be Among the World’s Most Expensive
Despite the swift expansion of instant payment systems across Africa, cross-border payment fees remain exorbitantly high. Sending $200 to another African nation can incur costs as high as 7.9%, more than double the United Nations Sustainable Development Goals target of 3%. As Africa’s cross-border payments market, currently valued at $329 billion, is projected to reach $1 trillion by 2035, these costs raise significant concerns.
Challenges Hindering Affordable Payment Solutions
Experts attribute these high costs to fragmented regulations, inconsistent policies, and an over-dependence on the US dollar. Without addressing these issues, it will be challenging to establish more affordable and efficient payment systems across the continent. Sabina Mensah, deputy chief executive officer of the Africa Nenda Foundation, emphasized the critical role of retail digital cross-border payments in fostering financial inclusion, economic integration, and sustainable growth throughout Africa.
Progress in Instant Payment System Development
Africa has made considerable advancements in the creation of instant payment systems. Currently, there are 36 such systems operating within the continent, including three regional platforms. Notable examples include the Pan-African Payments System (PAPSS), which serves West Africa and portions of East and Southern Africa, and the Instant Payments platform in the Southern African Development Community (TCIB) System, alongside GIMACPAY, which caters to the Central African Economic and Monetary Community.
Efforts Toward Regulatory Harmonization
Despite the burgeoning payments infrastructure, there remain substantial regulatory hurdles. Many central banks across Africa have yet to synchronize their policies concerning licensing, foreign exchange controls, and other regulations that significantly impact cross-border payments. Initiatives aimed at overcoming these challenges have commenced, spearheaded by the African Association of Central Banks (AACB). The organization has emphasized the need for harmonization in monetary policy and banking regulation.
Complex Challenges Surrounding Payment Integration
During a general meeting in Yaoundé, Cameroon, in November 2025, the AACB adopted Resolution 21, calling for the Task Force on Payment System Integration to lead continent-wide harmonization efforts, with support from Africa Nenda. The task force faces intricate challenges, as customer expectations for affordable and reliable payment services clash with providers’ struggles against data localization requirements and restrictive licensing agreements. These issues collectively inhibit efforts to connect Africa’s payment systems and diminish transaction costs.
Currency Dependency Impedes Progress
While the introduction of instant payment systems has accelerated money transfers, experts argue that speed alone is not the central issue; the deeper constraints lie in payments and liquidity. A significant number of cross-border transactions still depend on the US dollar for conversion. This reliance complicates matters as many African currencies are not easily convertible, and there are limited mechanisms for direct local currency settlements between nations.
A Collaborative Approach to Payment Solutions
To address these complexities, collaboration among central banks, commercial banks, and payment providers is essential to enhance regional payment arrangements. Expanding the acceptance of local currency payment options could significantly reduce costs, improve overall efficiency, and facilitate smoother cross-border transactions. Experts advocate for a practical path forward, suggesting that domestic instant payment systems integrate capabilities for cross-border transactions through existing regional networks. This would utilize existing infrastructure while minimizing costs and delays associated with launching entirely new systems.
