Cross-border payments face complexity in African markets

Regulatory hurdles and currency challenges are slowing payment settlement.

Ellen Kumwenda Mtine, Head of International Transaction Banking at Absa Corporate & Investment Banking, highlighted the intricacies of cross-border payments in African markets, emphasising the challenges brought on by regulatory differences, currency constraints, and operational complexities.

“In Africa, particularly, there’s a lot of complexity because there are different regulators, different time zones, different currencies...the interpretation and the enforcement is done at a local level,” she said during Sibos 2024 Beijing.

Mtine pointed out that even though the bulk of trade happens in foreign currency, the availability of certain currencies remains a constraint in some markets. “Foreign currency availability in some markets is a constraint, and that does tend to impact on the ability to make cross-border payments,” she explained during Sibos 2024 Beijing.

Despite these challenges, Mtine noted the progress being made to improve payment systems. “We’ve seen a lot of innovation around facilitating those payments, largely centred around low-value transactions settling instantly with instant payment settlement systems emerging over the last couple of years,” she added.

Looking ahead, Mtine expressed optimism for the continued development of cross-border payments, with new technologies and solutions on the horizon to address existing constraints.