Cross-Border Payments in West Africa: The New Engine of Regional Trade

Let me ask you a question that affects millions of businesses and families across West Africa.

How much does it cost you to send money across borders?

If you are like most people in the region, the answer is too much. Sending $200 across African borders costs an average of 7.9%. That is more than double the 3% target set by the Sustainable Development Goals.

But change is coming. West Africa stands at the crossroads of a financial revolution. The landscape of cross-border payments is transforming. The African cross-border payments market is valued at approximately $329 billion in 2025 and projected to reach $1 trillion by 2035.

This article explores how West Africa is leveraging technology, regulatory cooperation, and innovative payment systems. You will learn about the implications for regional trade, economic integration, and financial inclusion.

If you need professional support, market research services can help you understand this evolving payments landscape.

Understanding cross-border payments: a key definition

Before diving into the West African context, let us understand a fundamental concept: remittances.

According to the International Monetary Fund (IMF) , remittances are defined as “transfers from a well-meaning individual or family member to another individual or household” that are “targeted to meet specific needs of the recipients.”

These transfers represent a lifeline for millions of households across West Africa. They provide financial support for everyday expenses, education, healthcare, and small business investments.

Remittances to low- and middle-income countries rose by 5.8% in 2024 to $685 billion. This underscores their growing importance to developing economies.

The current state of cross-border payments in West Africa

West Africa’s cross-border payment ecosystem has both immense potential and significant challenges.

The fragmented payment landscape

Mobile money is gaining traction in West Africa, but the ecosystem remains fragmented. Countries like Ghana and Côte d’Ivoire have achieved strong mobile money adoption through operators such as MTN MoMo, Orange Money, and Wave.

However, in Nigeria, the region’s largest economy, mobile money uptake has been slower. This is due to a bank-dominated payment ecosystem and regulatory caution.

The fragmentation extends beyond mobile platforms. Sending money from Ghana to Nigeria still requires intermediaries or third-party apps. Local currency settlements are difficult due to reliance on USD rails.

The informal economy’s dominance

According to Afreximbank’s 2024 Informal Cross-Border Trade report, informal trades in the ECOWAS region are valued at about $5.7 million per month on average. These trades are driven by informal payment methods.

Physical cash couriers, family members, bus drivers, and cross-border traders often carry money across borders on behalf of others. While these methods offer flexibility and speed, they come with significant risks including fraud, theft, lack of documentation, and no legal recourse.

The cost barrier

Transaction costs remain a major obstacle to financial inclusion and economic growth in West Africa. Sub-Saharan Africa remains the most expensive region to send money to.

The average cost recorded at 7.73% in Q1 2024 is significantly higher than the global average of 6.35%. These high fees disproportionately affect small and medium-sized enterprises (MSMEs), which account for over 90% of jobs on the continent.

Recent innovations and technological breakthroughs

West Africa is experiencing a wave of innovation that promises to revolutionize cross-border payments.

The rise of instant payment systems

One of the most significant developments is the launch of instant payment systems. The Central Bank of West African States (BCEAO) recently launched the Instant Payment System (PI-SPI). It allows transactions to cross borders in seconds.

This infrastructure represents a technological achievement and a strategic move toward financial sovereignty. According to AfricaNenda’s State of Inclusive Instant Payment Systems 2024 Report, 31 instant payment systems are already active across Africa. Three of these allow real-time cross-border payments.

Strategic partnerships driving growth

According to PYMNTS.com , money movement company TerraPay launched a partnership with Wave Mobile Money to enhance cross-border remittance services in West Africa. This collaboration enables Wave users in Mali to instantly receive money from multiple money transfer operators.

In another significant development, Mastercard reports that Access Bank Group and Mastercard launched a unified cross-border money movement solution across various African markets in May 2024. This enables businesses and consumers to send and receive international payments to and from 150+ countries.

The Pan-African Payment and Settlement System (PAPSS)

By early 2025, PAPSS had enabled real-time cross-border payments across 17 countries. It connects 14 national switches and over 150 commercial banks. This infrastructure allows for instant, secure cross-border transactions in local African currencies.

Recent innovations include the integration of PAPSS into mobile banking apps for small and medium enterprises and diaspora remittance corridors.

The role of mobile money and fintech

Mobile money has emerged as a major force for financial inclusion in West Africa.

Mobile money’s impact

In 2022, mobile money platforms processed $837 billion in transactions globally. Africa was responsible for 66% of the volume. These platforms offer significantly lower fees than traditional banks, with rates ranging from 1.5% to 3%.

However, the success of mobile money has been uneven across West Africa. While countries like Ghana and Côte d’Ivoire have embraced mobile wallets, interoperability remains limited. A user in Nigeria cannot easily send money to a user in Benin or Togo using the same mobile platform.

West African fintech innovation

West Africa has a vibrant fintech scene addressing these challenges. African-based fintech companies such as LemFi, Geegpay, and Chipper Cash are gaining traction. They offer more localized and cost-effective solutions for cross-border payments.

These companies compete with traditional banks, global remittance giants like Western Union and MoneyGram, and large fintech firms such as Wise and Revolut. The competitive landscape is driving innovation and pushing down costs.

Digital wallets: the preferred payment method

Consumer preferences are shifting toward digital solutions. The PYMNTS Intelligence report found that consumers favor digital wallets for cross-border payments. This trend is particularly strong in West Africa, where mobile phone penetration is high.

Regulatory developments and regional cooperation

Effective cross-border payment systems require supportive regulatory frameworks and regional cooperation.

The African Continental Free Trade Area (AfCFTA)

The AfCFTA offers a major opportunity to fuel intra-African trade. For trade to happen, payments must be instant, affordable, and accessible to everyone. The free trade agreement has created momentum for harmonizing payment regulations across borders.

The growth of PAPSS aligns directly with AfCFTA goals. Intra-African trade is expected to increase from 18% to 50% annually by 2030.

Regulatory challenges and solutions

The regulatory environment in Africa is highly fragmented. Each country has its own rules regarding foreign exchange, anti-money laundering requirements, and transaction reporting. This fragmentation makes it challenging for providers to offer seamless cross-border payment services.

However, efforts to harmonize regulations are underway. Regional economic communities like ECOWAS are working to align KYC rules, AML measures, and consumer protection standards.

Regulatory compliance and governance advisory for Nigerian businesses can help payment providers navigate these regulatory requirements.

Impact on MSMEs and regional trade

The transformation of cross-border payments has profound implications for small businesses.

Empowering small and medium enterprises

MSMEs account for over 90% of jobs on the continent. However, these businesses have historically been disadvantaged by high transaction costs and slow payment processing.

The new payment infrastructures are changing this reality. Kenya Commercial Bank and Equity Bank have produced KCB Connect and Equity Direct to offer faster and more affordable regional transfers. Similar solutions are emerging in West Africa.

Top-tier banks like Nigeria’s Zenith Bank and Ecobank are also using specialized trade finance solutions and multi-currency accounts to simplify cross-border business transactions.

Driving intra-regional trade

Efficient cross-border payment systems are essential for boosting intra-regional trade in West Africa. When businesses can transact quickly, affordably, and transparently across borders, trade volumes increase.

Africa’s rapidly rising population, poised to reach 1.7 billion by 2030, will trigger greater economic growth. Efficient payment systems will be crucial for capturing this demographic dividend.

High Performance Selling (HPS) sales training programme can help financial service providers sell cross-border payment solutions effectively.

Looking ahead: the future of cross-border payments in West Africa

The trajectory for cross-border payments in West Africa is promising.

Market growth projections

By 2035, the market is expected to surpass $1 trillion, more than triple the 2025 value. Formal remittance inflows alone have maintained strong momentum, growing at an annual rate of 10-15%, averaging 12% over the past five years.

This growth is being driven by increasing diaspora transfers, fintech innovation, the rise of mobile money, and expanded intra-African trade enabled by initiatives like AfCFTA and PAPSS.

Vision for 2030

The AfricaNenda Foundation envisions that by 2030, over 260 million more Africans will have access to affordable instant payment systems. This vision encompasses not just technological advancement but also financial inclusion.

With over 400 million adults in sub-Saharan Africa still excluded from the formal economy, expanding access to digital payment services represents both a humanitarian imperative and an economic opportunity.

Remaining challenges

Customer acquisition costs for fintech companies can range from $5 to $30 per user. Long-term profitability depends on transaction frequency and the ability to cross-sell other financial services. In emerging markets where digital literacy remains low, user education is critical and expensive.

The industry is also becoming increasingly crowded. Traditional banks, global remittance giants, and fintech companies are all competing for market share.

Conclusion

Cross-border payments in West Africa are undergoing a transformation that promises to reshape regional trade, accelerate economic integration, and expand financial inclusion for millions.

From the launch of instant payment systems like PI-SPI to the expansion of PAPSS, from strategic partnerships between global payment giants and African banks to the rise of local fintech innovators, the ecosystem is evolving rapidly.

The journey is far from complete. High transaction costs, regulatory fragmentation, infrastructure gaps, and the dominance of informal payment channels continue to hinder progress. But the momentum is undeniable.

As the region moves toward this future, the benefits will extend far beyond convenience. Efficient cross-border payments will unlock prosperity, drive economic growth, create jobs, and strengthen the social fabric.

Recommended reading from our blog

If you want to strengthen your understanding of cross-border payments and financial services, these related articles will help.

Building a Risk-Aware Culture in Your Organization – Managing payment risks starts with organizational culture.

Board Evaluation: Why It Matters for Nigerian Businesses – Stronger oversight leads to better financial strategy.

Recommended services

Ready to tap into West Africa’s cross-border payment revolution? These services are designed to help.

Market research services – Understand cross-border payment trends and opportunities.

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Contract documentation and review support – Ensure your payment agreements are sound.

Reference Links

The following authoritative sources were cited in this article:

1. International Monetary Fund (IMF) – Remittances: Funds for the Folks Back Home

2. PYMNTS.com – TerraPay and Wave to Promote Cross-Border Remittances in West Africa (May 2025)

3. Fincra Blog – The State of cross-border payments within Africa (May 2025)

4. Africa Press – Africa Advances Seamless Cross-Border Payments

5. MicroSave Consulting – Cross-border payments in Africa: What is changing and why it matters (July 2025)

6. Fintech News Africa – Africa’s Cross-Border Payments Market Set to Triple by 2035 (July 2025)

7. Mastercard – Access Bank Group and Mastercard join forces for cross-border payments

8. Tranglo – Introduction to cross-border payments and remittances in Africa

9. TerraPay – Building Payments Infrastructure in West & Central Africa (July 2025)

10. Business Cardinal – Research-based sales training, sales coaching and sales consulting firm in Lagos, Nigeria

Where to go from here

Cross-border payments in West Africa are undergoing a transformation that promises to reshape regional trade, accelerate economic integration, and expand financial inclusion for millions.

Whether you are a financial institution looking to expand your regional footprint, a fintech company seeking market entry strategies, or a business leader wanting to optimize your international payment processes, understanding these trends is essential.

At Business Cardinal, we provide in-depth analysis, market intelligence, and strategic advisory services to help businesses and policymakers navigate the dynamic landscape of African finance.

Contact us today to discuss how we can help you tap into West Africa’s cross-border payment revolution.

📧 Email: hello@businesscardinal.com
📞 Phone: +234 802 320 0801
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