1. A milestone for Africa’s payment landscape
In a move that could reshape the way African countries trade with one another, the Common Market for Eastern and Southern Africa (COMESA) officially launched its Digital Retail Payments Platform in early October 2025. Designed to allow businesses and consumers to settle transactions directly in local currencies, the initiative seeks to remove one of the most persistent barriers to intra-African trade: dependence on foreign exchange and costly cross-border transfers.
The launch is both a technical innovation and a strategic signal. It shows that Africa’s regional institutions are no longer waiting for global payment infrastructures to adapt to their needs — they are designing homegrown solutions. For policymakers and entrepreneurs across the continent, this is not only about payments. It is about building financial sovereignty, regional value chains, and inclusive economic growth from the ground up.
2. From fragmented systems to regional integration
For decades, the African payment landscape has been marked by fragmentation. Each country’s banking and settlement systems evolved largely in isolation, with limited interoperability and strong reliance on correspondent banking arrangements. This fragmentation translated into high transaction costs, long settlement times, and limited trust in cross-border digital payments.
The situation began to shift over the past decade with the rise of mobile money, fintech innovation, and regulatory modernization. Initiatives such as the Pan-African Payment and Settlement System (PAPSS) — championed by Afreximbank and the African Continental Free Trade Area (AfCFTA) Secretariat — demonstrated the feasibility of cross-border clearing in local currencies. Yet implementation has been uneven. Only part of the continent has been connected so far, and many corridors remain dependent on commercial banks’ foreign currency accounts.
COMESA’s new platform aims to complement and extend this vision. Covering 21 member states, from Egypt to Eswatini, it could become the largest operational bloc-level retail payment system in Africa, serving 625 million people and thousands of small and medium-sized enterprises (SMEs).
3. What COMESA’s digital payments platform changes
According to COMESA’s Secretary-General, the system will initially link central banks, commercial banks, and payment service providers through a shared digital infrastructure that enables transactions in local currencies. The goal is to cut cross-border transfer fees to below 3 %, in line with the UN Sustainable Development Goal target for remittances, and to ensure settlement in real time or near-real time.
Operationally, the platform leverages an interconnected clearing mechanism that allows one country’s currency to be used and converted directly to another’s without going through the U.S. dollar or euro. It effectively reduces the double conversion problem that traders and payment providers have long faced.
This has three transformative implications:
- Cost efficiency: SMEs and households will save both on fees and on currency spreads.
- Liquidity management: Central banks will be able to monitor cross-border liquidity more precisely, facilitating macro-prudential oversight.
- Inclusion incentives: Digital cross-border tools can now be offered to smaller merchants, women entrepreneurs, and informal traders who previously relied on cash couriers or unregulated transfer intermediaries.
The system builds on lessons from earlier experiments like the East African Payment System (EAPS) and the SADC Integrated Regional Electronic Settlement System (SIRESS), which showed that interoperability requires both technology and governance harmonization. COMESA’s innovation lies in its attempt to combine policy coordination, central bank participation, and retail-level usability — the missing link between wholesale settlement systems and consumer-facing services.
4. Inclusion dividend: SMEs and women traders at the center
Beyond the macro headline, the real story is about micro-level empowerment.
In COMESA economies, SMEs represent roughly 80 % of firms and 60 % of employment. Yet their participation in regional trade remains low, constrained by costly payments, limited credit access, and weak digital literacy.
Allowing SMEs to transact directly in local currencies could help break this structural barrier. For example, a Zambian textile producer can now pay a Malawian supplier without holding dollar reserves or depending on informal brokers. Such functionality makes formal cross-border trade both feasible and affordable.
For women-led enterprises, often concentrated in small cross-border commerce, the impact could be even greater. These traders frequently operate in cash, exposing them to security risks and limiting their ability to build digital transaction histories. A regulated, accessible cross-border payment platform can formalize these flows and create data footprints that open access to credit, insurance, and other financial services.
However, to fully capture this inclusion dividend, governments and development partners must invest in financial education and digital capability-building. Traders and SMEs need to understand not just how to use the new platform, but how to manage foreign exchange exposure, reconcile digital records, and protect themselves against fraud.
5. Currency sovereignty and the path toward financial resilience
The platform also reflects a deeper economic rationale: strengthening monetary autonomy.
African countries have long been vulnerable to exchange-rate volatility and the scarcity of foreign reserves. When cross-border trade depends on the dollar, any tightening of global liquidity — as seen in recent years — constrains domestic growth.
By enabling settlement in local currencies, COMESA members are gradually internalizing regional liquidity. This does not eliminate the need for foreign currency, but it reduces dependency and builds resilience. It also sends a signal that Africa’s regional blocs are ready to act collectively, an essential precondition for future monetary cooperation.
The move echoes similar trends worldwide. In Europe, the Single Euro Payments Area (SEPA) achieved monetary efficiency through harmonized standards and mutual trust between regulators. In Africa, systems like COMESA’s could be the building blocks of a “multi-hub” continental architecture, eventually linked through PAPSS or the AfCFTA digital corridor.
6. Building interoperability: lessons from Africa and Europe
Interoperability remains the cornerstone of payment innovation. COMESA’s model borrows from the technical successes of regional peers but adds a unique governance layer. The design allows central banks to maintain oversight, while private payment providers can plug into the system through APIs and shared standards.
In West Africa, the BCEAO’s new Instruction 001-01-2024 has reinforced interoperability across e-money issuers, aggregators, and fintechs — ensuring that consumers can send money across networks in real time. Similarly, in Europe, PSD3 and the forthcoming digital euro initiatives aim to guarantee universal access and resilience across payment systems.
The parallel is instructive. Both regions are seeking safe, efficient, and inclusive digital payment ecosystems, though their contexts differ. Europe’s challenge is preserving competition and consumer protection in a mature market; Africa’s is scaling connectivity and trust. By studying each other’s experiences, both can accelerate their learning curves.
7. Policy and capacity-building implications
For policymakers, the COMESA launch brings a clear agenda:
- Enhance coordination between central banks and fintechs. Regulation must evolve from control to collaboration, ensuring prudential integrity without stifling innovation.
- Develop regional settlement backstops. Liquidity lines, clearing arrangements, and risk-sharing mechanisms are needed to sustain local-currency convertibility.
- Invest in digital and financial literacy. The most advanced infrastructure is only as effective as the users’ capacity to trust and adopt it.
- Integrate data protection and cybersecurity from the start. As cross-border data flows grow, harmonized privacy and security frameworks become essential.
- Foster private sector participation. Banks, microfinance institutions, and fintechs must see clear commercial incentives to integrate.
Development partners — including the World Bank, AfDB, GIZ, and EU — can play a catalytic role by funding training programs, supporting cross-border sandboxing, and providing technical assistance to regulators.
The Global Findex 2025 data release adds an important perspective: digital accounts and connectivity continue to drive inclusion, but meaningful usage still lags behind ownership. Bridging this “last mile” will require platforms like COMESA’s to be not only available, but also usable, affordable, and trusted.
8. Challenges and risks to watch
No major reform comes without risks.
Among the most immediate challenges are:
- Currency volatility: Local-currency settlement does not eliminate FX risk; it merely shifts where that risk is absorbed. Hedging mechanisms must be developed to protect participants.
- Operational resilience: As regional infrastructures scale, maintaining cybersecurity and redundancy becomes critical.
- Regulatory asymmetry: COMESA’s member states are at very different stages of payment regulation maturity. Harmonizing licensing and supervision will require sustained dialogue.
- Adoption inertia: For many banks and businesses, change entails cost. Incentives — including fee reductions and simplified onboarding — will be essential.
- Coordination with PAPSS: Avoiding duplication and ensuring interoperability across regional systems will determine whether Africa achieves a truly continental payments network.
Still, these challenges are not deterrents. They are signs that Africa is entering a new stage of financial development, one where innovation, coordination, and regulation evolve in tandem.
9. Looking ahead — connecting Africa’s digital corridors
The COMESA platform should not be seen in isolation. It is part of a broader transformation: the emergence of digital corridors linking African economies through payments, identity systems, and trade data.
As other blocs (ECOWAS, SADC, EAC) advance their own infrastructures, the next phase will be inter-regional connectivity — the ability for a trader in Nairobi to pay a supplier in Dakar as easily as within Kenya. That vision aligns with the AfCFTA’s Digital Trade Protocol and Africa’s ambition to capture more value from intra-continental trade.
Europe, too, can find common cause. Cross-regional cooperation on RegTech, SupTech, and digital standards could help build bridges between Africa’s inclusion priorities and Europe’s financial stability objectives. Initiatives under the EU-Africa Global Gateway could integrate payment interoperability and financial education components into trade and investment programs.
10. Conclusion — One step closer to “inclusive globalization”
The launch of COMESA’s Digital Retail Payments Platform may appear technical, but it represents a profound shift in economic governance. It shows that Africa is not merely catching up with digital finance trends — it is charting its own course, anchored in inclusion, resilience, and regional cooperation.
If properly implemented, the platform could become a model for local-currency integration, reducing dependency on external systems while empowering millions of small traders. It will require investment, education, and cross-regional learning, but the direction is clear: toward an Africa where digital payments serve real people and real economies.
As policymakers in Europe debate the digital euro, and as central banks worldwide experiment with new forms of money, Africa’s experience provides a compelling reminder: innovation is most meaningful when it advances inclusion.
In that sense, COMESA’s decision is more than a payments reform — it is a statement about the continent’s future. A future where technology supports sovereignty, where markets connect people, and where digital finance becomes a true driver of shared prosperity.
Estelle Brack, PhD
Founder & Chairwoman, KiraliT Advisory
Expert in digital finance, payments, and financial inclusion across Europe and Africa
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