Cross-border payment hurdles slow African firms' expansion, industry leaders say

Industry leaders have said cross-border payment challenges and fragmented financial regulations are slowing the expansion of African businesses beyond their domestic markets. They spoke at the inaugural The Borderless Experience, organised by Condia in Lagos last Thursday.

The event brought together senior executives from McKinsey & Company, Interswitch, Zest Payments and other stakeholders to discuss the gap between Africa's growing demand for cross-border transactions and the financial infrastructure available to support businesses operating across multiple markets.

$100bn moved through unregulated channels

Akeem Lawal, Divisional Chief Executive Officer for Payment Processing and Switching at Interswitch, disclosed that about $100bn in cross-border payments moved out of Nigeria in the past year through unregulated channels. He said the figure highlighted the scale of the opportunity available to financial technology companies and other businesses capable of developing solutions for Africa's cross-border payment needs.

“The problem today that I see, and that Interswitch is trying to solve, is that we now need to take the sophistication we have created in Nigeria and expand it outside of Nigeria,” Lawal said.

Regulation is fragmented

Kemi Manuel, Chief Executive Officer of Zest Payments, noted that technology alone would not solve the continent's cross-border payment challenges. “The biggest challenge I think we have in Africa is regulation, and it's fragmented,” Manuel said.

She explained that businesses, particularly fintech companies, face different licensing requirements when attempting to replicate the same business model across African countries. This makes it difficult for businesses to scale seamlessly across borders. Manuel also pointed to early discussions among regulators around the possibility of establishing a shared licence that could eventually operate across several African countries. Such a framework, she suggested, could help reduce some of the regulatory barriers.

Founders need practical answers

The event, convened by Condia founder Benjamin Dada, also examined broader challenges businesses face as they move from domestic operations into regional and international markets. Dada said the conference was inspired by gaps he repeatedly encountered while reporting on African startups.

“I realised I didn't want to build a startup. I wanted to build a product that solves the problem,” Dada said. He added that entrepreneurs often approached him about securing licences, finding banking partners, hiring talent and navigating other practical hurdles.

“A lot of people have talked to me about building a startup but can't seem to find licences or banking partners, who to hire, or answers to some of the real-world challenges. Those are the conversations we want to create room for,” he said.

Earlier, Ricky Asemota, a partner at McKinsey & Company, stressed that business growth must be matched by the ability of organisations to absorb and implement new ideas. “The capability that is proportionately valuable is not the ability to create new ideas; it's going to be the ability to absorb them,” she said.

The organisers said The Borderless Experience would continue as a series focused on giving founders and operators practical access to the people building the financial infrastructure required to support cross-border business growth in Africa.

What it means for Nigerian businesses

The scale of unregulated cross-border outflows from Nigeria shows a clear gap in formal payment channels. For fintechs and businesses looking to expand, the combination of weak payment infrastructure and fragmented regulation remains a major barrier, but the interest from regulators in shared licences offers a possible path forward.