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An introduction to cross-border payments within the COMESA region of Africa
Within Africa, cross-border payments are yet to become seamless and efficient, and correspondent banking relationships with multiple intermediaries still dominate the payments arena. The cultural divide between anglophone and francophone countries extends to key differences in legal and regulatory frameworks, governance structures, payment channels and currencies. This paper explores the landscape of cross-border payments and the various associated challenges, emphasising the importance of keeping to a specific journey and focusing on one hurdle at a time. Written against the backdrop of the recently passed Africa Continental Free Trade Area agreement, this paper argues that if Africa is to succeed in its pursuit of an effective cross-border retail payments environment, the various stakeholders involved will have to embrace customer-friendly interfaces, fair pricing, standard operating rules and predictable/ reliable payment rails. While it is possible to have differences in infrastructure, as shall be seen in the paper, the adoption of common principles is essential to the development of the sector.
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Andrew M. Wamicwe is the Regulatory Director in charge of Mobile Financial Services at Airtel Africa. He is a lawyer with over 13 years’ experience in financial services law, mobile financial services, public policy and regulation. His professional experience started at a leading commercial bank in Nairobi, after which he joined the Central Bank of Kenya. He holds a master’s degree in public policy from Strathmore Business School, and has taken executive courses on FinTech and regulation at Oxford University and the London School of Economics, respectively.