Africa’s Cross-Border Payments Hit a Local-Currency Liquidity Bottleneck

What changed

Africa’s cross-border payment network is getting faster, but local-currency liquidity is struggling to keep pace. In February, PAPSS and Kenya’s Pesalink said more than 80 Pesalink participants were connected to over 160 banks on PAPSS, enabling 24/7 payments in local currencies.

That creates a bigger settlement network, but not automatically a cheaper one. Banks and payment providers still need the right currencies, at the right price, when transfers arrive.

Why it matters

The bottleneck sits behind the sleek payment interface. A transfer can move instantly on the front end and still face friction when institutions settle across currencies. Deeper liquidity is needed if faster payments are also going to become cheaper.

Africa already has a powerful digital-payments foundation. Mobile money processed more than $2.1-trillion globally in 2025, and countries across Africa excluding North Africa generated more than two-thirds of the growth in registered accounts. The continent’s payment innovation is not the missing ingredient. Currency depth is.

That matters because remittances remain more expensive in Africa than in any other region, even as global average costs have fallen to about 6%. The new rails may improve speed and reach, but the report does not establish that PAPSS connectivity has yet reduced costs or settlement times.

Stablecoins are being presented as one possible pressure valve. Their global market capitalisation reached about $320-billion by the end of May, and TransFi says it works across more than 70 countries, 250 payment methods and 40 currencies, alongside local payment rails. But stablecoin transfers still face fees, foreign-exchange spreads and the costs of moving money on and off the network. Their popularity does not, by itself, solve the shortage of usable local currency.

The practical test is simple: whether a payment can complete quickly, predictably and at a price that survives the final exchange into local money. Until liquidity improves across currencies, Africa may have built the express lane before fully stocking the tollbooths.