Doing Business Across Borders: What East and West Africa Teach Us About Payments

Regulation: Same Goal, Different Paths

East Africa and West Africa operate under vastly different regulatory ecosystems. In East Africa, the financial regulatory environment is more digitally progressive, especially in Kenya, where the Central Bank has actively supported mobile and fintech-led innovation. However, licensing and compliance requirements can shift quickly, especially for cross-border service providers.

In West Africa, countries like Nigeria and Ghana have more mature banking sectors but tighter foreign exchange controls. The Central Bank of Nigeria, for example, has historically imposed restrictions on international FX transactions to stabilize the naira, often causing delays and reduced access to foreign currencies for businesses.

Navigating these differences requires not just local partners but also dynamic compliance support that evolves with shifting rules. (sources; Central Bank of Nigeria – FX Guidelines 🔗 World Bank – Fintech Regulation in Africa)

Currency and FX: A Balancing Act

East Africa is dominated by diverse local currencies; KES (Kenyan Shilling), TZS (Tanzanian Shilling), and UGX (Ugandan Shilling), each carrying its own volatility risks. In contrast, parts of West Africa benefit from the CFA franc (XOF/XAF), used in 14 countries and pegged to the euro, offering relative monetary stability. Still, Africa remains one of the most expensive regions for sending money, with average cross-border costs at 6.3%, compared to the global average of 4.3%.

Without a smart FX strategy, businesses risk losing margins to fluctuating exchange rates and high transaction fees.🔗 World Bank Remittance Prices Worldwide – Q4 2023

Payment Preferences: Local Matters

East Africa leads in mobile money adoption—over 70% of adults in Kenya use M-Pesa. QR codes, mobile wallets, and USSD make fast, low-cost payments the norm. In West Africa, bank transfers dominate in urban areas, but mobile money is rapidly expanding, especially in Ghana and Côte d’Ivoire. Tailoring payment options to local preferences improves both trust and speed. 🔗 GSMA State of the Industry Report on Mobile Money, 2024

Infrastructure: Gaps Still Slow Cross-Border Flow

Both regions have made progress in real-time payment systems, but cross-border infrastructure remains fragmented. Intermediaries, hidden fees, and inconsistent settlement times continue to add friction. As a result, payment infrastructure and network coverage are critical success factors for businesses moving money across the continent.🔗 African Development Bank – Payments Systems in Africa, 2023

One Solution for Two Realities

At IPT Africa, we understand that success in Africa isn’t about choosing East or West, it’s about building a solution that works for both.

Our platform connects to local banks and mobile money networks, offers real-time FX visibility, and ensures compliance with evolving local and international regulations. Whether you're paying teams, vendors, or partners across regions, we make it simple, secure, and cost-effective.

Let’s simplify your cross-border payments. Contact us to streamline your cross-border transactions and grow with confidence.