Accelerating Africa: The power of global standards to transform cross-border payments

When we send messages to the other side of the world with the click of a button, it’s only natural to expect to send payments with the same speed. Being able to make payments safely and efficiently is critical for supporting economic development. In recent years, financial institutions and major organisations have increasingly recognised how vital cross-border transactions are for enabling economic growth and global connectivity. 

One continent that clearly illustrates the benefits of enhanced cross-border payments is Africa. Underpinned by digital innovation, the region’s electronic payments market is rapidly expanding - reaching 674.8 million USD in 2023 and predicted to reach 3.45 billion USD by 2032, according to IMARC.

Despite this meaningful progress, unique challenges remain across countries such as varying levels of infrastructures, inconsistencies in regulatory environments, and significant gaps in digital capabilities. These differences point to a need to strengthen an interconnected payments ecosystem so that Africa and other continents can avoid fragmentation and continue growing sustainably. 

Sustained progress

Digitisation has helped drive an economic transformation in Africa over the past few years. In fact, recent data from Swift found exciting improvements in cross-border payments speed. As of October 2024, 87% of payments sent to Africa settle within an hour – reflecting a 1.5% improvement from the year prior. Africa is closing the gap with other regions, as 92% of payments to the Eurozone settle within an hour (up by 3%) and 88% of payments to the Middle East settle within the same period (up by 1.8%). These figures underscore a steady year-on-year enhancement in payment speeds, which is pivotal for both regional and international trade because the improved efficiency increases accessibility and ensures smoother financial transactions.

Equally noteworthy is how instant payment systems are transforming the ways that money moves within Africa. Despite having 42 individual currencies and distinct regulatory systems, Africa currently accounts for 70% of the world’s $1 trillion mobile money value – and that figure is rising. Sending payments to different countries across the region helps strengthen internal trade while simultaneously laying the foundation for a higher volume of cross-border payments.

Facing obstacles

Despite these strong advancements, cross-border payments speeds remain slower in Africa than in other regions due to a lack of uniformity. There are substantial gaps between the most and least digitised countries, influenced by factors including diverse regulatory frameworks, operational complexities, and varying levels of technological adoption.  

These challenges show us firsthand the importance of interoperability to effectively move money across these different ecosystems. Targeted innovation, such as new electronic and instant payment systems in the region, can help improve the speed of payments. 

Swift’s Global Payments Innovation (GPI) initiative is one such innovation that is now the norm in cross-border payments and is making a real impact across Africa. GPI reduces friction by offering end-to-end payments tracking, transparency, and the ability to transfer transaction information unaltered. This results in faster transactions and same-day use of funds. There has been a strong uptake of GPI in the region, with 77% of payments across Africa being GPI-enabled at some point during the payment chain. 

Setting the standard

Another initiative driving efficiency in cross-border payments is the adoption of global standards. ISO 20022, an open global standard for financial information, is a critical enabler for improving payment speed and accuracy. It provides consistent, rich and structured data that can be used for every kind of financial business transaction. Having this universal language helps streamline important processes and enhance sanction screening, facilitating smoother and more efficient transactions. 

African institutions have shown a strong commitment and readiness to adopt these standards. The next step is to provide the necessary support and resources to help them achieve this goal. Significant progress has already been made with many central banks and major financial institutions from across the region successfully transitioning. As more institutions follow suit, the continent will further its connection with other regions, serving as a catalyst for economic growth.

Moving forward

It’s exciting to see the rapid growth of both intra-African and cross-border payments. We’re witnessing the progress that comes from major institutions collaborating on these efforts, from the G20 to the IMF and beyond. However, the journey to further advance efficient cross-border payment methods is far from over. Stakeholders must continue investing in technologies and adopting standards that drive faster and more transparent payments. By doing so, they will not only enhance Africa's financial connectivity, but also contribute to a shared vision of robust global economic development. 

The speed of payments plays a crucial role in fostering economic growth and connectivity. Rapid and reliable transactions can drive trade, investment, and financial inclusion, particularly in regions with emerging markets. Swift, a global leader in cross-border payment infrastructure, is at the forefront of driving this progress.