The benefits of cross-border payments for businesses are numerous. For a business to truly scale out of its base and expand its networks of customers, employees and partners, it must have access to an efficient system of cross-border payments.
For African businesses to tap into the growing global business market, they need access to infrastructure that can provide secure, fast and convenient cross-border payments.
However, despite the technological advancements in payments, enormous challenges are still plaguing cross-border payments across Africa. Complexities around Africa, including different currencies and economies, make cross-border payment strenuous. There’s also the challenge of every other country having a different payment system. These huddles are particularly frustrating for businesses as making or receiving payments across borders is a necessary activity.
Moving money across borders requires transferal through the relevant domestic systems, which most have different working hours and are in different time zones. For some systems, the funds are pathed through several banks before reaching their destination.
These processes attract significant bank fees at each payment gateway making cross border payments expensive. Regulatory costs and currency conversion costs also add to the price of a cross-border transaction.
The complex nature of cross border payments also causes transactions to be slow. The traditional cross border payment method typically takes up to five days in some cases.
As the process gets slower during a cross border transaction, the risk of a security breach increases. This delay does not exude confidence in consumers who spend days being anxious about every transaction.
Another considerable challenge in cross border payment is the lack of transparency in pricing, cost and deductions involved with every transaction.