Duplo Forecasts Major Growth in Cross-Border B2B Payments Across Africa Amid Shifting Global Trade Dynamics
Duplo, a leading provider of payment, spend, and vendor management solutions for African businesses, has unveiled a new report predicting significant expansion in cross-border B2B payments across Africa.
This growth is anticipated as a result of evolving global trade patterns and the emergence of innovative payment solutions, which are expected to unlock the full potential of both intra- and extra-continental trade.
The report, titled The State of Cross-Border B2B Payments in Africa and its Impact on Trade, is the third edition in Duplo’s annual series on B2B payment trends. It examines key factors driving trade within and outside of Africa, the current landscape of cross-border B2B payments on the continent, and future projections.
In 2022, the value of intra-African trade reached an estimated $193 billion, accounting for 13.8 percent of total trade in Africa. However, this figure likely understates the true scale of intra-African commerce due to the significant portion of informal and underreported cross-border trade.
Notably, 40 percent of cross-border trade payments between East and West African countries are conducted in cash, with underreporting rates ranging from 12 to 76 percent. Formal large-value cross-border B2B payments continue to be dominated by traditional banking channels, despite their high transaction fees and lengthy processing times.
The report stresses the urgent need for B2B cross-border payment solutions that can accurately capture and efficiently facilitate these transactions. Interoperability between various payment systems remains a major challenge, especially for cross-border transactions.
Of the 32 instant payment systems operating across Africa, fewer than half are seamlessly interoperable, highlighting the importance of initiatives like the Pan-African Payment and Settlement System (PAPSS).
While Africa’s share of global trade value has remained stagnant at 3%, emerging global trends suggest a potential shift in trade patterns.
The rise of various Asian economies, the evolving multipolar world order led by the US and China, and other factors could create new opportunities for effective B2B cross-border payment solutions that enhance trade within and beyond Africa. These solutions could improve transparency, reduce transaction costs, and boost efficiency.
Yele Oyekola, CEO and co-founder of Duplo, emphasized the role of technology in overcoming the limitations of traditional banking systems.
“As businesses adapt to evolving global trade patterns, the demand for efficient and cost-effective cross-border payment solutions is rising. Our report underscores the essential role that technology can play in fostering economic growth throughout the continent,” Oyekola stated.
The report is available for free download on Duplo’s website.
Source: Tech in Africa
