Africa remains the world's most expensive region for cross-border payments, and the cause is structural. With 54 countries and 42 currencies, each built on largely siloed national payment systems, the continent generates inefficiency at every transaction point.
Moving money across African borders often costs more than sending it intercontinentally − compounded by currency conversion, compliance duplication, and limited interoperability. Dismantling decades of fragmented infrastructure is a challenge as political as it is technical.
Africa paying a premium for its own trade
In 2020, G20 leaders endorsed the Roadmap for Enhancing Cross-border Payments, coordinated by the Financial Stability Board (FSB), with a target to make cross-border payments faster, cheaper, more transparent and more inclusive by 2027.
Progress remains uneven. The 2025 annual progress report identifies sub-Saharan Africa (SSA) as the G20’s most challenged region − and the slowest globally for wholesale cross-border payments, with only 24.2% of payments credited within one hour (see figure 1). Retail costs remain stubbornly high, ranging between 3.1% and 3.5% across person-to-business (P2B), business-to-person (B2P) and business-to-business (B2B) transactions (see Figure 2). For businesses trading across the continent, these costs translate directly into a penalty on intra-African commerce.
[insert figure 1, from page 65 of the report linked above]
Figure 1: Wholesale payments to Africa continued to be the slowest, but with signs of improvement (Source: G20 Roadmap for Enhancing Cross-border Payments: Consolidated Progress Report for 2025)
[insert figure 2, also from page 65]
Figure 2: Costs of retail payments from sub-Saharan Africa remained high compared to the global average costs. (Legend: B2B = business to business; B2P = business to person; P2B = person to business; P2P = peer to peer) (Source: G20 Roadmap for Enhancing Cross-border Payments: Consolidated progress report for 2025)
AfCFTA’s missing piece
The African Continental Free Trade Area (AfCFTA), operational since 2021, targets a single market of 1.3 billion people with a combined GDP of approximately $3.4 trillion. On paper, the prize is transformative, but payment infrastructure remains the most persistent bottleneck.
Dr. Abdullah Verachia, director at Harvard SEP and the head of faculty for strategy and digital at GIBS, puts it plainly: “Trade policy without the ability to move money easily is incomplete. That said, payments are not the whole story. Logistics, customs processes, regulatory inconsistency and trust still account for a large share of cross-border friction.”
The structural problem is costly: transactions between African countries are typically converted to US dollars or euros before being routed back into local currencies, adding cost and settlement delays to every deal. Research associate at GIBS’ Centre for African Management & Markets, Francois Fouché, quantifies the impact: “In 2025, data suggested that cross-border payment costs in Africa were among the highest in the world, often eating up 6-8% of transaction value. This acted as a massive disincentive for intra-African trade, making it cheaper for a Ghanaian firm to buy from China than from Nigeria.”
Without affordable, fast, interoperable payments, AfCFTA’s broader reforms cannot deliver their full commercial value. As Verachia cautions: “My sense is that payments probably solve a quarter of the problem, which is significant, but not transformative on their own. Their real power is catalytic. They make other reforms more valuable and easier to implement.”
Payment system revolution
Africa’s cross-border payment infrastructure is expanding rapidly. Last year, Mastercard increased its African acceptance network by 45%, extending the reach of Mastercard-enabled payments across physical terminals, online checkouts, QR points and ATMs − giving businesses broader access to a globally recognised payment system.
Meanwhile, PayPal is reportedly preparing to launch PayPal World in Africa this year. Unlike its traditional account-based model, PayPal World uses interoperability to let users transact across borders directly from existing local digital wallets via a PayPal checkout button − without needing a US-based account. Users who have historically been locked out of international payments due to local wallets lacking card network backing will now be able to participate.
Fouché says the launch changes the strategic timing for consumer-facing businesses: “Previously, e-commerce entities had to build bespoke integrations for M-Pesa in Kenya, Verve in Nigeria, and Fawry in Egypt. PayPal’s new interoperability layer means a business can integrate one standard and reach wallets across the continent.”
If well executed, PayPal World could meaningfully reduce the friction of African-to-global commerce − particularly for freelancers, SMEs, and consumers who’ve been locked out of international platforms.
“By enabling SMEs to accept digital payments and settle cross-border trade instantly, the effective ‘speed of money’ in the African economy accelerates,” says Fouché. “This velocity allows smaller firms to turn over inventory faster, effectively competing with larger multinationals that previously held a monopoly on efficient treasury operations.”
The clock is ticking for business – move now or wait?
Businesses with significant cross-border payment volumes have the most to gain from early adoption. Those operating within a single domestic market face less urgency, though forward planning remains valuable as the Pan-African Payment and Settlement System (PAPSS) coverage expands. For platform businesses and fintech, early integration with PAPSS-connected rails may define their regional competitive positioning entirely.
Companies that adopt this capability early will be best positioned to capture the cross-border digital consumer, says Fouché: “This is especially true for the creative industries and digital services sectors, where audiences are global, but payment infrastructure has historically been constrained by local borders.”
Verachia’s concern is not technology risk, but strategic hesitation: “Many African firms are waiting for ‘clarity’ before moving. The danger is that by the time clarity arrives, the market structure will already be set. Platforms will have consolidated, pricing power will have shifted, and late movers will have fewer choices.”
Early adopters gain cheaper transactions, faster settlement, and access to new markets − but also absorb the uncertainty of emerging infrastructure. “The right move is not to bet the balance sheet, but to engage early enough to learn, shape partnerships, and build internal capability. Timing will differ by industry and firm size, but doing nothing is increasingly the riskiest option,” says Verachia.
The convergence of PAPSS, commercial interoperability through PayPal World and Mastercard’s expanded network, and AfCFTA's Digital Trade Protocol creates a genuine foundation for lower-cost, faster African commerce. The question for businesses is no longer whether this will happen, but whether they will be positioned to benefit when it does.
“Africa’s payment convergence is not a silver bullet. But it is one of the most practical, underappreciated shifts underway. Handled well, it can change how African businesses think about scale, geography, and growth. Handled poorly, it will simply add another layer of complexity. The difference will come down to leadership judgement, not technology,” says Verachia.
Both academics agree these systems will help formalise Africa’s largely cash-based informal markets. For institutions like GIBS, says Verachia, that raises a responsibility beyond technical finance education: “We need to train leaders who understand how real African markets work, who can design strategies that bridge formal and informal systems, and who see inclusion as a source of resilience rather than a compliance exercise.”
The lesson is the same one the PAPSS-era infrastructure is trying to replicate continentally: when payment rails are fast, affordable, and embedded in tools people already use, economic activity expands around them.
Is this Africa’s SEPA moment?
Launched in 2008, Europe’s Single Euro Payments Area (SEPA) made cross-border payments across 41 countries − including all 27 EU member states plus Switzerland, Norway, Iceland, and the UK − as simple and cheap as domestic transfers. Is Africa approaching an equivalent moment?
Dr. Abdullah Verachia, director at Harvard SEP and head of faculty: strategy and digital at GIBS, is careful not to over-romanticise the comparison. SEPA was built on institutional depth, regulatory alignment, and a shared currency. Africa, he argues, is doing something fundamentally different: “We are connecting fragmented systems in spite of fragmentation. That distinction matters.”
Research associate at GIBS’ Centre for African Management & Markets Francois Fouché adds: “SEPA was a bank-centric initiative designed to preserve the centrality of credit institutions. The African integration includes mobile network operators and fintechs as first-class citizens.”
Africa’s closest operational equivalent is the Pan-African Payment and Settlement System (PAPSS) − functioning like a very early SEPA. With more than 160 commercial banks on its platform, PAPSS enables cross-border settlement in local African currencies, reducing costly dollar routing while advancing regional financial integration.
“By 2026, the convergence of PAPSS and private sector aggregators is driving costs down toward the 3% mark − effectively a margin expansion for African businesses,” says Fouché.
What matters, says Dr. Verachia, is not that Africa is converging on a European model, but that the practical costs of cross-border commerce are finally falling in ways businesses can feel: “Faster settlement, better visibility of funds, and growing interoperability change behaviour. When firms trust that they will get paid, they trade more, they experiment more, and they take regional opportunities seriously rather than treating them as theoretical.”
Gallery
