For years, if you asked any African business owner what percentage of their transfer value they were losing to fees, they would wince. Eight percent was the industry average for intra-African payments just three years ago. Think about what that means in practice: send $10,000 to a supplier in Ghana from Nigeria, and $820 disappears to banks, FX spreads, and correspondent networks. Not to your supplier. Not back into your business. Gone.

My first reaction when I saw the new PwC report this week wasn't surprise. It was something closer to cautious relief.

The numbers have genuinely shifted. According to the analysis published this week, the average cost of cross-border payment costs in Africa has fallen to 5.8%, down from 8.2% in 2023. PAPSS, the Pan-African Payment and Settlement System, now processes over $3.2 billion in monthly transaction volume, up from $800 million in early 2024. That's a real structural change, not a rounding error.

But I want to be careful here, because "falling costs" is the kind of headline that can make you feel like the problem is solved when it isn't. So let me walk through what's actually driving this shift, why it matters for African businesses paying or receiving money across borders, and what you should still be watching closely.

How We Got to 8% in the First Place

To understand why cross-border payment costs in Africa are dropping, you need to understand why they were so high.

When a Nigerian business wanted to pay a Kenyan supplier, the money almost never traveled directly from Lagos to Nairobi. It would convert from naira to dollars, travel through a correspondent bank in New York or London, convert again into Kenyan shillings, and arrive stripped of a few percent at every stop. Two FX conversions. Two or three intermediaries. Each one taking a slice.

This wasn't a conspiracy. It was just the architecture of global finance in Africa, built at a time when intra-African trade was small enough that nobody bothered to construct direct rails. The US dollar became the de facto clearing currency for transactions that never touched American soil, simply because it was the only liquid option available.

The result was a system that charged African businesses more to pay other African businesses than it cost to pay suppliers in Europe or North America. The World Bank's RemittancePrices database has documented this absurdity for years. The most expensive payment corridors in the world have consistently been in sub-Saharan Africa, and businesses on those corridors bore that cost with very little alternative.

What PAPSS Actually Does

I get asked about PAPSS a lot, and there's usually a gap between the headline and the real understanding of what the system does.

PAPSS is infrastructure, not a consumer product. It's a payment and settlement system built by the African Export-Import Bank, designed to let banks and payment operators clear intra-African transactions in local currencies, without routing through a third-country correspondent bank. Instead of naira converting to dollars converting to cedis, PAPSS holds positions in both currencies and nets them out directly.

The cost saving is structural. When you remove the dollar leg of the transaction, you remove the correspondent bank's fee, the FX conversion spread, and a significant chunk of the processing time. The $3.2 billion in monthly transaction volume PAPSS now handles represents a growing portion of intra-African trade that no longer needs to take that expensive detour.

What PAPSS is not is a universal fix for every corridor and every payment type. Its reach is expanding, but concentration is still heaviest among the larger economies and the financial institutions that have formally connected to its network. A small business trying to pay a supplier in a frontier market may still find themselves on the old rails for a while. Knowing whether your bank or payment provider is on the PAPSS network is a question worth asking directly.

The MTN MoMo and Mastercard Deal Is More Significant Than It Looks

When Mastercard and MTN announced last week that they're deepening their cross-border partnership across 12 African markets, including Nigeria, Ghana, Cote d'Ivoire, Uganda, and Tanzania, the headline read like dozens of other fintech partnership announcements you've seen and forgotten.

I'd encourage you not to dismiss this one so quickly.

The specific claim of up to 40% fee reduction for small and medium businesses on cross-border transactions matters for one reason: MTN MoMo has distribution at a scale that most fintech players can only dream about. Over 60 million active MoMo wallets across the continent. The persistent challenge with infrastructure improvements like PAPSS is the last mile. Even if the rails are cheaper, the consumer-facing product still has to be accessible, trusted, and affordable for the people who actually need it.

Mobile money networks already have that distribution locked in. If Mastercard's expanded partnership genuinely routes transactions over lower-cost rails and passes the savings through to end users, it changes the economics for the small traders and SMEs who are doing high-volume, lower-value cross-border payments, which is most of us.

I'm still waiting for independent verification of the specific fee claims, but the structural logic is solid. Watch this one.

What's Still Broken

A 5.8% average cross-border payment cost sounds considerably better than 8.2%. It is. But it's still nearly twice the 3% target the United Nations Sustainable Development Goals set for global remittances by 2030. And averages conceal a lot of variance.

The naira situation hasn't fully resolved. Nigeria's foreign exchange market has gone through several rounds of reform over the past few years, and while the official and parallel rates have converged considerably, businesses dealing with FX liquidity still face unpredictability that adds to their effective transaction cost beyond any headline fee. A transfer that costs 5% in stated fees can cost you another 3-5% if you're converting at an unfavorable rate because liquidity is thin on the day you need to move.

Compliance costs are rising, not falling. As African payment corridors get more active, they also attract more regulatory scrutiny. KYC and AML requirements are stricter. Documentation requirements are higher. For some corridors, correspondent banks are still in a de-risking mode, pulling back from relationships they find too complex to manage. If you're a smaller business working with a smaller regional bank, this is where you tend to feel the squeeze most, in delays, in documentation requests, in the occasional transfer held up for verification.

Settlement timing still lags behind what's possible. In most African corridors, even on improved infrastructure, settlement can take 24 to 72 hours. For businesses managing cash flow on tight timelines, that gap is real money tied up in transit.

What to Do With This Information

If you're a business that regularly moves money across African borders, paying suppliers, receiving from customers, or running operations in multiple countries, this environment rewards doing your homework in a way it didn't two or three years ago.

Start by calculating what you're actually paying. Not the advertised rate. The total cost: fee, FX spread, and what actually arrives at the other end. I've talked to business owners paying 9-10% all-in once you account for the exchange rate spread, who assumed they were on a 4% plan because that's what the fee schedule said. That gap is profit walking out the door.

Then ask your current provider directly whether they route over PAPSS rails. Some payment fintechs that connected to PAPSS infrastructure early can now offer meaningfully better rates on intra-African corridors compared to traditional banks on the same route. It's a specific question with a specific answer.

For Nigerian and Ghanaian businesses especially, the expanded MTN MoMo corridors are worth testing for transfers under $5,000. Mobile money settlement is often faster and cheaper at that scale. For larger B2B payments, dedicated business payment platforms tend to offer better rates, more predictable settlement windows, and treasury tools that help you manage timing around FX moves.

We built Afriex to work specifically on these corridors, though I'd genuinely encourage you to compare your options and find what fits your payment volumes and the corridors you operate on most frequently. The market is more competitive today than it was two years ago, which means you have more leverage as a customer than you might realize.

The Bigger Picture

The real story behind these falling numbers isn't any single technology or partnership. It's volume. PAPSS went from $800 million to $3.2 billion in monthly transaction volume in under two years. As more trade flows over the new rails, the economics improve for everyone on those rails.

AfCFTA is part of this trajectory. As the African Continental Free Trade Area creates more formal trade corridors and reduces tariff barriers on goods moving across the continent, the payment infrastructure for those corridors is being built alongside the trade itself. More goods crossing borders means more payments to move, which means the infrastructure gets used, which means the economics improve. It's a cycle that actually works in our favor for once.

That doesn't mean the problem is solved. The difference between 5.8% and 3% is still hundreds of millions of dollars leaving African businesses every year for no good reason. And the improvements are not evenly distributed. Some corridors have caught up significantly. Others are still expensive and slow.

But we are past the point where this was theoretical. The infrastructure is real. The volume is real. The question for your business is whether you're going to wait for the savings to come to you, or go find what's already available right now.