The most expensive countries in the world to send remittances are largely African. As of 2023, the global average for sending $200 is 6.3%, but in Africa, it is as high as 27%.  

This is why Nshuti Mbabazi, Managing Director of the Better Than Cash Alliance—a coalition of 80 governments and companies promoting digital payments—has called for mobile network interoperability across Africa to make cross-border transactions cheaper and faster.

Speaking at the Inclusive FinTech Forum in Kigali, Rwanda on Monday, Mbabazi emphasised that it is unfair for Africans to pay high transaction fees when sending money within the continent.

"When I cross borders with my MasterCard or Visa card, I can make payments, but when I try to pay with mobile money, it is not accepted as a merchant payment. Instead, I have to send a remittance," she explained.

She highlighted that the reliance on remittances increases the cost of trade in Africa and called for a system where merchants can accept payments from any African bank account or mobile wallet.

Echoing Mbabazi’s concerns, Bobson Rugambwa, CEO of MVend—a Rwandan financial software company—pointed out that many cross-border transactions within Africa are routed through systems outside the continent.

"We lose out twice: first, in the balance of trade, and second, in the inefficiencies of the current system. We need to fix this," he said.

While interoperability could solve this issue, Rugambwa noted that data localisation laws present a major challenge. Financial institutions are often required to obtain licenses in each African country where they operate and store customer data locally—an impractical requirement for most businesses.

"Many governments insist on keeping financial data within their borders to facilitate investigations in case of fraud or crime," Rugambwa said.

As a potential solution, he suggested establishing one or two large regional data centres across Africa, ensuring governments have access to data when needed while allowing businesses to operate more efficiently.

Dr. Talkmore Chidede, Senior Digital Trade Expert at the AfCFTA Secretariat, highlighted that the AfCFTA Digital Trade Protocol (AfCFTA DTP) addresses many of the interoperability challenges affecting cross-border transactions in Africa.

"Under this protocol, businesses operating in Africa’s digital market are not required to localise data in every country where they operate," Chidede explained.

While the protocol has yet to be fully implemented, he noted that Nigeria, Kenya, and South Africa are among the countries ready to adopt it.

Michelle Nsanzumuco, founder and CEO of Global Policy House & AfCFTA Digital Trade Expert, urged the private sector to push for the adoption of the protocol, emphasising its role in fostering financial inclusion and economic growth across Africa.

Cross-border transactions within Africa continues to be a problem despite the number of payment companies on the continent solving different problems. But with solutions like merchant of records and AfCFTA DTP this problem could be past tense soon.