This paper investigates the rapid expansion of cross-border payment firms across Africa and explore the implications for entrepreneurship and SMEs. This shift has been propelled by the spread of mobile money, the rise of FinTech’s, and the adoption of blockchain systems—each widening access to financial tools in markets previously underserved. While these innovations have reduced friction in international transactions, their benefits remain unevenly distributed across the SME landscape.
Mobile money has broadened domestic financial inclusion, yet its role in international transfers remains limited by regulatory and infrastructural constraints. For many SMEs, cross-border commerce is still marked by high costs, delays, and restricted access to banking infrastructure; and although mobile money eases in-country transactions, its reach across borders remains narrow. These gaps made room for cross-border providers—blockchain systems that allow SMEs to settle in local currencies and interface with mobile networks. New firms now leverage blockchain to bridge the limitations that mobile money cannot. Statista estimates Africans sent over USD $100 billion in remittances in 2022, including nearly USD $20 billion within the continent, underscoring both the role of cross-border payments to Africa’s economy and the strain on existing infrastructure.
Regulatory fragmentation across Africa’s 54 jurisdictions forces firms to grapple with conflicting requirements, increasing operational costs and elevating compliance burdens, especially for smaller players. Where frameworks are enabling, investment and competition flourish; where they are inconsistent, risks of fraud, exclusion, and market concentration intensify.
Despite growing digital uptake, gaps in infrastructure and awareness continue to limit adoption, with low rural connectivity and rising cyber threats in countries lacking adequate safeguards remaining significant barriers. Cross-border systems open pathways to global participation, yet uptake remains limited to a small subset of SMEs, most often the larger and better-resourced firms, in sub-Saharan Africa. Contributing factors include limited knowledge of international regulatory requirements, low levels of digital literacy, and restricted access to reliable internet services.
Often described as the most disruptive use case of blockchain technology, Bitcoin is reshaping digital finance across Africa, with products like Bitnob showing how it can reach smaller SMEs through secure wallets, virtual USD cards, and instant local-currency transfers. As new policies emerge, the priority is regulatory alignment that prevents old barriers from reappearing. The task ahead is to deepen this innovation around local needs: protect vulnerable SMEs, ground regulation in their realities, and remove the obstacles that still limit participation.
Reference:
Olalekan, O., Adeleye, D. O., & Srivastava, V. K. (2024). The surge of cross-border payment firms in Africa: Implications for entrepreneurship and SMEs. International Journal of Science and Research Archive, 13(1), 684–696. https://doi.org/10.30574/ijsra.2024.13.1.1728
