The Role of Real-Time Payments in Boosting Intra-Africa Trade

Real-Time Payments (RTP) systems are transforming how money moves around the world. These systems allow funds to transfer instantly between accounts, 24/7, settling transactions in seconds rather than days. Unlike traditional banking, which processes payments in batches during business hours, RTP provides near-immediate settlement with complete transparency. The benefits are substantial: improved cash flow, reduced processing costs, enhanced customer experience, and new business opportunities that weren’t possible with slower payment systems.

For Africa, real-time payments represent a critical solution to longstanding trade challenges. The continent faces a significant trade imbalance as it conducts more business with the rest of the world than with neighbouring countries. According to the latest data from Afreximbank, intra-African trade reached 208 billion USD in 2024, showing a 7.7% growth. Whilst this shows positive development,  it represents only 16% of Africa’s total trade, whereas in Europe, the intra-regional trade accounts for over 60% of total trade.

Intra-African trade offers the continent a wealth of opportunity but is hindered by payment system failures that make cross-border business expensive, slow, and risky. Real-time payment systems are now emerging as the key to unlocking Africa’s massive internal market potential. By enabling instant, low-cost transactions between African countries, real-time payment systems remove the financial barriers that have historically made intra-continental trade uneconomical for many businesses. This transformation allows African companies to build stronger regional supply chains and tap into the continent’s 3.4 trillion USD economy more effectively.

The Payment Problem in Africa 

The reality that many businesses face when trading across African borders includes factors such as:

• High costs: Traditional cross-border payments cost African economies an estimated 5 billion USD annually in lost trade opportunities. Banks remain the most expensive option, with average costs reaching 11.48% according to World Bank data.
• Complex currency exchanges: About 48% of cross-border payments in Africa involve a third intermediary currency, usually the US dollar. This adds extra costs and complexity.
• Regulatory hurdles: Each country has different rules, making compliance a daunting task for businesses attempting to expand across borders.

What Are Real-Time Payments and Why Do They Matter?

Real-time payment systems enable money to be transferred nearly instantly between accounts, 24/7, typically completing transactions within seconds. This speed transformation is particularly beneficial for businesses, as they gain faster access to funds, which dramatically improves cash flow management and increases payment processing efficiency. When a supplier receives payment instantly, rather than waiting 3-5 days for funds to clear, they can reinvest that money immediately, pay their own suppliers faster, and operate with greater financial flexibility. The immediate availability of funds also reduces the need for credit facilities and working capital loans that businesses traditionally use to bridge payment delays. This growing recognition of the value of real-time payment is driving explosive global adoption. It grew from 24.16 billion USD in 2023 to over 28.5 billion USD in 2024. By 2027, RTPs are expected to account for 27.8% of all digital payments worldwide.

How Are Real-Time Payments Boosting Intra-African Trade

Real-time payments represent a pivotal opportunity for Africa to bypass traditional banking limitations and establish a more advanced, interoperable financial framework. By enabling instant, transparent, and cost-effective cross-border transactions, RTP transforms payments from a barrier into a driver of regional economic integration. For businesses, this shift redefines cross-border commerce, not as a challenge to overcome, but as a strategic avenue for expansion across African markets.

Speed That Accelerates Economic Efficiency

Real-time payments are transforming operational agility for businesses. By enabling instant fund transfers, RTP improves cash flow management, eliminates settlement delays, and boosts efficiency throughout supply chains. Suppliers can dispatch goods without waiting for payment clearance, while SMEs gain access to capabilities previously reserved for large enterprises with premium banking arrangements. The result is faster commerce, increased liquidity, and a more level playing field.

Lower Costs, Higher Profits

RTP significantly reduces transaction costs by removing intermediaries and streamlining foreign exchange processes. This not only increases profit margins but also makes low-value transactions economically viable. For merchants, it unlocks previously inaccessible markets, where high cross-border fees once made expansion unfeasible. Therefore, maximising margins and reach simultaneously.

Financial Inclusion

By integrating seamlessly with mobile money platforms, real-time payments expand financial access across underserved populations. Individuals in remote or rural areas, such as farmers and micro-entrepreneurs, can now receive payments directly to their mobile devices, without relying on traditional banking infrastructure.

Real Progress: PAPSS Leading the Way

The Pan-African Payment and Settlement System (PAPSS) represents Africa’s most comprehensive solution to cross-border payment challenges. PAPSS is a centralised financial market infrastructure that enables near-instant cross-border payments in local currencies across Africa, eliminating the need for expensive correspondent banking relationships and third-party currencies like the US dollar.

The system operates by connecting central banks, commercial banks, and payment service providers across the continent through a unified network. For instance, when a business in Tanzania pays a supplier in Kenya, PAPSS converts Tanzanian shillings directly to Kenyan shillings without routing through New York or London banks.

PAPSS adoption is accelerating rapidly. The system expanded significantly with 3 additional central banks and 50 more commercial banks joining the network in recent periods. As of late 2024, more than 150 commercial banks use PAPSS, with around 90 conducting active pilots. The system now operates across 13 central banks and connects 13 payment switches across the continent.

The impact is clear: PAPSS is reducing transaction costs in intraregional trade while formalising a significant portion of informal cross-border trade. Small and medium-sized enterprises, which previously faced prohibitive transaction costs, are now finding cross-border trade financially viable through the system.

The Future of Real-Time Payments in Africa

At the same time, the timing couldn’t be better for RTP expansion across Africa. The African Continental Free Trade Area (AfCFTA) is generating unprecedented demand for efficient cross-border payments, with projections indicating potential increases in intra-African trade of more than 50% by 2025. This could add 450 billion USD to Africa’s GDP by 2035. Countries investing in digital payment infrastructure now will have competitive advantages for decades, positioning themselves as regional trade hubs. Africa’s young demographic profile also creates a natural market for RTP adoption, as younger populations are more comfortable with digital payments and mobile money solutions. 

What This Means for Your Business

Companies that embrace these systems early will gain significant competitive advantages through improved cash flow, reduced transaction costs, and access to previously untapped markets. The speed of real-time payments transforms supplier relationships, enabling more flexible payment terms and fostering stronger partnerships with vendors who can rely on near-instant payment.

For businesses looking to expand across African markets, RTP eliminates many traditional barriers to entry. Small and medium enterprises can now compete with larger corporations because they have access to the same instant payment capabilities that were once exclusive to companies with expensive banking relationships. This democratisation of cross-border payments opens up new opportunities for businesses of all sizes to participate in Africa’s growing intra-continental trade.