Despite the growing presence of fintech solutions, Africa’s cross-border payment challenges are rooted in more than just technology, according to central bank executives. While technological infrastructure for instant transactions already exists, regulatory, economic, and political hurdles continue to hinder seamless financial exchanges across the continent.

At the Inclusive Fintech Forum in Kigali, Rwanda, industry leaders repeatedly discussed Africa’s ongoing struggle with instant cross-border payments. During a panel session titled “Dialogue Between Central Bankers on Digital Money,” experts emphasized that while blockchain and fintech innovations provide technical solutions, the real barriers to smooth transactions are non-technical.

Kwame Oppong, Director of Fintech and Innovation at the Bank of Ghana, noted that solutions like the Pan-African Payment and Settlement System (PAPSS) were designed to streamline cross-border payments but have not fully resolved the issue. PAPSS, which operates similarly to Nigeria’s Inter-Bank Settlement System (NIBSS) on a continental level, integrates major central banks and payment processors like Interswitch, Pesalink, and Kenswitch. Yet, despite its existence since 1993, Africa is still struggling with efficient cross-border transactions.

“Infrastructure has never been the problem,” Oppong stated. “It is about investment capacity and political will.”

In fact, Africa already boasts some of the most developed real-time payment markets globally. Nigeria ranked sixth worldwide in real-time payments in 2021, recording 3.7 billion transactions, according to ACI’s Prime Time for Real-Time report. Other countries like Ghana have also built highly interoperable instant payment systems, allowing seamless transfers between mobile wallets and bank accounts—a feature some G7 nations still lack.

While fintechs and digital payment systems have accelerated financial inclusion, regulatory inconsistencies, currency volatility, and lack of economic alignment remain critical obstacles to achieving instant cross-border payments.

One major issue is foreign exchange (FX) instability, said Christian Kajeneri, Director of Payment Systems at the National Bank of Rwanda. A potential solution—a common African currency—has been discussed for decades, but progress has been slow.

For example, the Economic Community of West African States (ECOWAS) has been working toward the adoption of a single currency, the “eco,” for over 35 years. The goal was to reduce dependence on foreign currencies and promote regional economic stability. However, despite a proposed 2020 launch, disagreements—particularly between Nigeria and Francophone West African nations—have led to multiple delays, with a new target set for 2027.

For an efficient cross-border payment system, African countries must agree on standardized financial regulations, including Know Your Customer (KYC) and data protection laws.

Dr. Tumubweinee Twinemanzi, Executive Director of the Payment Systems Directorate at the Bank of Uganda, explained that inconsistent KYC policies across countries create additional roadblocks. While some nations enforce strict verification protocols, others have laxer regulations, making it difficult to establish trustworthy cross-border transactions.

Another challenge is liquidity imbalances in currency exchanges. “If we consider transactions between Uganda and Rwanda, we must ask: To what extent do Rwandans need Ugandan shillings, and vice versa?” Twinemanzi pointed out. This disparity in demand affects currency flows, making it difficult to maintain efficient exchange mechanisms.

Despite these challenges, some countries have successfully implemented instant cross-border transactions. Oppong revealed that Singapore and Ghana developed a Financial Trust Protocol, allowing seamless transactions between the two nations.

“Both countries realized they had baseline similarities in their data infrastructure, which facilitated transactions,” Oppong explained. Many African nations share similar financial structures, yet have failed to implement comparable interoperable systems.

While fintech innovations have created technical solutions, central bank leaders agree that the ultimate responsibility lies with regulatory authorities. By developing a comprehensive financial framework that fintechs can integrate into, Africa could finally unlock the full potential of instant cross-border payments and drive economic transformation across the continent.