Africa’s cross-border payments market is projected to triple in size over the next decade, reaching $1 trillion by 2035, up from $329 billion in 2025, according to a new report by Oui Capital, an Africa-focused venture capital firm.
The sector is expected to grow at a compound annual growth rate (CAGR) of 12%, driven by fintech innovation, intra-African trade expansion, and soaring mobile money usage.
However, the report noted that despite its immense potential, the market remains riddled with structural inefficiencies that cost businesses and consumers billions of dollars annually.
Mobile money driving growth
According to the report, Africa is already the global leader in mobile money adoption.
In 2022, the continent recorded 781 million registered mobile money accounts, a 17% year-on-year increase.
- These platforms processed $837 billion in transactions, which represents 66% of global mobile money volume, underscoring their growing role in facilitating cross-border payments.
- It added that fintech solutions have helped cut remittance costs significantly, with average fees falling to 3.5%, compared to 8–12% charged by traditional banks, as transfers now take minutes rather than days, making them more attractive for small businesses and individuals alike.
- Still, remittance costs across Africa remain the highest globally, averaging 7.4% to 8.3%. Regulatory fragmentation, limited digital identity infrastructure, and foreign exchange (FX) volatility continue to stifle progress.
“Only 55% of African countries currently allow electronic Know-Your-Customer (e-KYC) procedures, forcing fintechs and financial institutions to repeat compliance processes across markets,” the report stated.
Forex liquidity challenge
Oui Capital estimates that $5 billion is lost annually due to poor FX liquidity, double currency conversions, and lack of interoperable digital payment infrastructure.
It added that the reliance on offshore USD/EUR clearing for intra-African transactions compounds the problem.
“In countries like Nigeria, inconsistent forex policies and liquidity challenges create further bottlenecks,” the report stated.
The report identifies major opportunities to unlock value, which include:
- Improved interoperability between mobile money networks could save up to $5 billion annually.
- API-driven infrastructure and robust digital rails are critical for seamless cross-border transactions.
- Stablecoins and cryptocurrencies offer up to 60% reduction in fees and promise faster, cost-effective settlements without dependence on traditional forex markets.
- Establishing decentralized African FX exchanges could help reduce conversion costs, stabilize exchange rates, and boost intra-African commerce.
What you should know
The Oui Capital’s report comes out at a time cross-border payment is gaining momentum in Africa through the Pan-African Payment and Settlement System (PAPPS) initiative.
Nairametrics reported that 22 Nigerian commercial banks have now joined the platform to streamline continental cross-border payments for their customers.
Launched in January 2022 by Afreximbank in partnership with the African Union and the African Continental Free Trade Area (AfCFTA) Secretariat, PAPSS serves as a centralized platform that enables instant, secure, and efficient cross-border transactions across Africa.
It allows for payments to be made in local currencies, thereby reducing reliance on third-party currencies like the U.S. dollar, minimizing transaction costs, and supporting the expansion of trade under the AfCFTA.
