Africa Cross-Border Payments (Simplified)

Africa cross-border payments is an emerging innovation that is aimed at solving the problem of restrictions to trade across the African borders.

Over the years, many formal and informal businesses have suffered huge financial losses due to the high costs and risks involved in trading their goods and services across the borders.

We can’t deny the fact that the free flow of trade and finance across the African borders will have a huge impact on the growth of Africa’s economy.

Even though foreign currencies still remain a payment method in some African regions, when trading across Africa, there is a gradual wide adoption in the use of local currencies in most inter-trade transactions across African countries.

Many influential economic and political forces have been shaping Africa’s banking sector over the last few years to allow for more inclusion of Africans in cross border trade. Digitization and technological innovation across the region is also playing an important role in defining Africa’s financial landscape.

Some pan-African players are already seizing the opportunities offered by these shifts and using them to create innovative solutions that will simplify Africa cross border payments.

Several Financial technologies (FinTech) based companies in Africa are playing active roles in driving the digital transformation of financial services across Africa and are providing opportunities for African economies to emulate successful financial eco-systems such as those in Europe and North America.

One of such notable FinTech companies in East Africa is M-Pesa, which is a Kenyan-based mobile money service provider.

It reported that it had more than 30 million users across 10 countries accessing a range of services including international transfers, loans and health provision, in 2017 alone.

This Mobile payments service it provides enables consumers to make payments from anywhere using only their mobile phones.

This has really helped to increase the level of financial inclusion in remote regions in Africa, where people do not have easy access to bank branches or sophisticated financial services.

Banks are also partnering with telecommunication companies and FinTech companies to deliver new and cheaper financial services to their customers. M-Schwari is another Kenyan mobile-based loans application that was created in partnership with the Commercial Bank of Africa and

Other pan-African banks are now looking at how more digital financial service products can be introduced to several small business owners in Africa, including those in remote regions.

While these efforts have seen a notable transformation in simplifying Africa cross border payments, there is still a lot more that needs to be done.

A simplified payment system for Africa doesn’t just have to be accessible to anyone in Africa, it has to be free for everyone too.

While several FinTech companies are successfully trying to create frictionless payment systems, the need for It to be free hasn’t been explored yet.

This is a gap that Waya, a simplified and free cross border payments platform has been actively filling since 2018. Waya is making use of technology to create frictionless payments and borderless financial services for Africans, without having to pay extra transaction fees.

Making payments within an African country and across African countries is as easy as sending an SMS or a WhatsApp message. This is a welcome development in the African FinTech space in simplifying Africa cross border payments.

Apart from Financial restrictions, what are the other challenges that exist in cross border trade in Africa?

Originally published at http://wayamoney.wordpress.com on December 15, 2020.