Scaling cross-border payments solutions in Africa is difficult due to complex regulatory frameworks , high fees, and settlement delays. These problems have slowed trade on the continent, panelists said at Moonshot by TechCabal in Lagos. 

The complexity of cross-border payments is not just a financial or legal issue—it’s a technological one, the panelists said. Each transaction involves integrating various payment technologies at different stages. 

Payments are not just fund transfers; they include data exchanges. For instance, participants must validate amounts, confirm the parties’ identity, and ensure the transaction’s authenticity in seconds. Scaling this process across borders brings complications.

“We can define cross-border payments as moving money between countries. These payments typically flow through the U.S. dollar system, but the infrastructure underpinning it is decades old, relying on outdated messaging systems from decades ago,” said Guy Stiebel, VP of Product at Cedar Money. “The inefficiencies and friction in this process are what make it so difficult.”

Regulation has become an even greater challenge for payment solutions startups because they must comply across multiple jurisdictions. 

“Fintechs have to keep up with changing regulations in every market they operate in. The regulatory landscape is constantly evolving, so maintaining a close relationship with regulators is crucial,” said Moyo Sodipo, co-founder and COO of Busha.

Cross-border services are not easy to build 

Creating cross-border payment products that can operate effortlessly across different markets is no small feat. Fintechs must build a consistent product that adapts to local requirements. 

For instance, onboarding a business in Nigeria is different from South Africa or Kenya, yet the product must remain cohesive. The challenge lies in designing for multiple markets without fragmenting the user experience.

Stiebel said achieving this consistency in a shifting regulatory environment is no easy task. 

“Clients expect a reliable experience regardless of the regulatory hurdles. Building a product that withstands these shifts while maintaining user trust is incredibly difficult,” he said.

Despite these challenges, fintechs want to fix cross-border payment gaps because of the potential in the market. Over 40 million Africans live abroad and send money back home regularly. They need faster and more affordable platforms, an opportunity that fintech wants to capitalise on. 

“Fintech is what happens when financial systems fail. Cross-border payments, historically, have been plagued by inefficiencies, and that’s where technology companies see a chance to make a difference,” said Stiebel.