Africa: Cross-border Payments at a Crossroads: Innovations and Challenges Shaping Global Trade

In the past seven years, businesses across industries have experienced extraordinary transformations, driven by technological advancements and evolving economic and political landscapes. Nowhere is this evolution more apparent than in cross-border payments, a critical pillar of global trade.

The movement of money across borders is undergoing a seismic shift, with innovative solutions emerging to meet the growing demand for seamless transactions. This trend is particularly pronounced in Africa, where intra-continental trade has the potential to increase income by $450 billion by 2035. Similarly, other emerging markets are embracing advancements that promise faster, more efficient payment systems.

Traditional Banking Yields to Innovative Payment Solutions

Recent years have seen a gradual move away from traditional banking systems in cross-border payments, giving rise to innovative alternatives. The demand for faster, more seamless transactions has fueled this shift, with stablecoin infrastructures gaining traction as viable solutions. Platforms like Ripple leverage stablecoins to bypass traditional banking channels, offering quicker and more cost-effective transactions.

While cryptocurrency regulation remains contentious in regions such as Africa, government-backed initiatives are paving the way for innovation. For instance, the Pan-African Payment and Settlement System (PAPSS) is actively working to streamline payments across the continent.

Verto’s mission is to simplify cross-border payments for businesses, championing innovative approaches that eliminate unnecessary friction. Traditional processes often involve intermediary-heavy systems that result in delays, inefficiencies, and high costs. For example, payments between Nigeria and Kenya often route through the U.S. financial system, causing delays of up to two days.

Our commitment to efficiency has enabled us to process 99.8% of payments within 24 hours. To push the envelope further, we are exploring the integration of stablecoins into our payment stack while collaborating with central banks to ensure compliance and safety.

Geopolitical Shifts as Catalysts for Change

Macroeconomic and geopolitical events have reshaped the global payments landscape. For example, Nigeria’s recent economic reforms, including the unification of exchange rates, have simplified transactions but also spurred inflation and currency volatility. Addressing these challenges requires innovative solutions.

Verto’s Effective Treasury Management platform is one such solution, enabling businesses to lock in forex rates at the time of transaction initiation, thus safeguarding against market fluctuations. As we look to 2025, the interplay of geopolitical shifts, currency volatility, and policy changes will demand adaptability from businesses engaged in cross-border trade.

The Need for Integrated Payment Infrastructures

The demand for seamless payment systems continues to grow in a world increasingly driven by global trade. The rise of remote work and decentralized teams underscores the importance of payment infrastructures that transcend borders. Businesses expanding their global footprint need systems capable of moving money as easily as goods and services.

Africa, with its unique challenges of currency volatility and liquidity, stands to benefit significantly from more integrated payment systems. Ensuring smooth cross-border transactions will be key to unlocking the continent’s trade potential.

Spotlight: Cross-border Payments in the African Francophone Zone

The African Francophone zone, characterized by its fragmented cross-border payment systems, highlights the need for innovation. Despite the CFA franc’s peg to the euro, inefficiencies persist, with payment processing often taking weeks. By introducing innovative solutions to this market, Verto is working to reduce reliance on the U.S. dollar and empower businesses to trade efficiently using local currencies.

The Road Ahead

As 2025 approaches, the future of cross-border payments promises both challenges and opportunities. Trends like the disintermediation of traditional banking and the rise of innovative payment infrastructures point to a critical juncture: adapt or fall behind.

Collaboration among businesses, policymakers, and financial service providers will be essential to address currency volatility, liquidity gaps, and systemic inefficiencies. The road ahead demands resilience and foresight, but the potential to revolutionize global trade and payments has never been greater.