Why Interoperability Remains the Bottleneck
Africa now has more mobile money accounts than bank accounts in several markets, but most mobile money schemes were built as domestic, closed-loop systems. A wallet in Ghana generally can’t pay a wallet in Kenya directly — the transaction has to detour through a bank, a card network, or an aggregator that bridges the two systems, each hop adding fees and settlement time.
- Currency conversion friction compounds on top of interoperability gaps — thin liquidity in many African currency pairs means wide spreads and unpredictable settlement rates.
- Divergent regulatory regimes mean a payment license valid in one jurisdiction carries no weight in the next, forcing providers into a patchwork of local partnerships just to move money regionally.
- Correspondent banking relationships for African currency pairs have thinned over the past decade as global banks de-risk, pushing more volume through fewer, costlier channels.
What’s Actually Improving the Picture
Regional payment schemes are making real progress. The Pan-African Payment and Settlement System (PAPSS) is designed specifically to let African central banks and commercial banks settle cross-border trade in local currencies without routing through a hard currency intermediary — a structural fix, not just a faster wrapper around the old process. Mobile money interoperability initiatives within regional economic blocs are also starting to link wallet ecosystems that were previously isolated.
For acquirers and PSPs, the practical opportunity is building on top of these regional rails rather than replicating the old correspondent banking model in a new interface. Providers who integrate early with schemes like PAPSS gain a genuine cost and speed advantage over those still routing African-to-African payments through European or US correspondent banks.
“The winners in African cross-border payments won’t be the fastest to add another currency corridor — they’ll be the ones who build directly on the regional settlement infrastructure instead of routing around it.”
What Acquirers and PSPs Should Prioritise
- Evaluate direct participation or partnership access to regional settlement schemes like PAPSS ahead of competitors still reliant on correspondent banking.
- Build FX risk management into cross-border product design from day one — thin liquidity currency pairs need deliberate treasury strategy, not an afterthought.
- Map licensing requirements corridor by corridor rather than assuming continental coverage from a single approval.
- Prioritise mobile money interoperability partnerships in markets where wallets, not cards, are the dominant rail.