Intra-African Payment Challenges Confronted by Digital Nomad Entrepreneur
The issue of intra-African payments remains a complex one, despite the growing demand for cross-border transactions within Africa. Several persistent challenges, such as slow transaction times, high costs, inaccessibility for the unbanked, lack of technological infrastructure, cybersecurity concerns, and dependence on foreign currencies, collectively create significant barriers to smooth, affordable, and accessible intra-African payments.
These factors have resulted in significant delays and expenses for businesses and individuals alike, with cross-border payments taking up to five days to process and transaction fees being prohibitively expensive. However, a fintech solution named Monirates is addressing this challenge by providing a platform that simplifies intra-African payments through currency management and real-time settlement.
Monirates operates as a fintech solution, enabling businesses to conduct cross-border transactions using local currencies while avoiding dependence on foreign currencies like the US dollar. This approach helps reduce currency conversion costs and risks, speed up transaction times, increase transparency and accessibility for businesses, and enable real-time, 24/7 payment processing.
Founded by Nigerian entrepreneur Nnenna Nkata, Monirates initially started as a peer-to-peer transfer tool but has since pivoted to building infrastructure for direct transfers and quick settlements. The company is focusing heavily on B2B partnerships, partnering with procurement platforms, logistics firms, and commerce networks to expand its reach and support intra-African trade.
Monirates' mission is to build Africa's payment engine, supporting intra-African trade, scaling across regulation, and reflecting the economic ties that already exist between countries. This aligns with broader African initiatives such as the Pan-African Payment and Settlement System (PAPSS) and the African Currency Marketplace, which also seek to promote the use of local currencies and improve the efficiency of intra-African payments.
In addition to its focus on improving cross-border payments, Monirates is investing in fraud prevention, monitoring over 15 fraud indicators. The company has also moved from a consumer payments tool to an infrastructure provider, offering "infrastructure-as-a-service" for tech-enabled businesses moving money within Africa.
The complexity of intra-African payments is further compounded by the number of currencies and the disconnected regulatory frameworks across regions. With 42 different currencies in Africa, cross-border payments can be complex due to fragmented regulations. However, Monirates supports the African Continental Free Trade Area (AfCFTA) frameworks and tools like PAPSS, working to streamline cross-border payments and make them more accessible for businesses and individuals alike.
As the demand for cross-border payment solutions continues to grow, with cross-border payments reaching $194.8 trillion globally in 2024, Monirates is stepping into a space that was once neglected. The company is helping to bridge the gap in infrastructural, cost, speed, and currency dependence issues, facilitating smoother and cheaper cross-border trade within Africa.
[1] Source: African Development Bank [2] Source: Monirates [3] Source: TechCabal [4] Source: McKinsey & Company
Note: The exchange rate used in the article is ₦200/$1 in 2015.
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- Monirates, a fintech startup, aims to streamline intra-African payments by managing currencies and ensuring real-time settlement, addressing the complexities and delays associated with cross-border transactions within Africa.
- By enabling businesses to conduct cross-border transactions using local currencies, Monirates reduces the dependence on foreign currencies like the US dollar, thereby cutting down on currency conversion costs and risks.
- The technology industry is witnessing the emergence of startups like Monirates, which are focusing on improving finance and logistics within the African business landscape, seeking to support intra-African trade and promote the use of local currencies.
- Recognizing the importance of collaboration, Monirates aligns with broader African initiatives such as the Pan-African Payment and Settlement System (PAPSS) and the African Currency Marketplace, to improve the efficiency of intra-African payments and promote trade.
- With the growing demand for cross-border payment solutions, Monirates is stepping into a gap created by the complexities and challenges associated with intra-African payments, aiming to make cross-border trade within Africa smoother, cheaper, and more accessible.
