Today on The Settlement Layer: Concrete regulatory changes are landing in Nigeria and Kenya, altering the cost and compliance landscape for digital payments. At the same time, major card networks are rapidly deploying production-grade AI, moving from pilot to a new operational standard for fraud and dispute management.
Effective Wednesday, the South African Revenue Service (SARS) made it mandatory for all travellers to complete an online declaration form within 24 hours of entering or leaving the country. The new system aims to modernize customs and improve compliance. However, on the day after the rule became mandatory, the online portal and mobile app were reportedly inaccessible, creating confusion and potential delays for travellers.
Why it matters
This is a direct operational signal for any business involved in moving goods or people across South African borders. While the goal is modernization, the implementation stumbles create immediate friction. For merchants relying on cross-border logistics, these teething problems could translate into delays and compliance headaches. It underscores the gap that often exists between regulatory intent and digital execution, a key risk factor in African markets.
South Africa's Constitutional Court ruled this week that the Competition Commission can move forward with its long-standing forex-rigging case against six global banks, including BNP Paribas and JPMorgan Chase. The case alleges the banks colluded to manipulate the rand-dollar exchange rate between 2007 and 2013.
Why it matters
While the alleged events are historical, this ruling re-ignites scrutiny over the integrity of the ZAR foreign exchange market. For any business managing large forex flows, the case is a reminder of the potential for market manipulation by major players, which can affect exchange rates and hedging costs. A successful prosecution could lead to tighter regulation and oversight of forex trading in South Africa.
The Central Bank of Nigeria revoked 46 microfinance bank (MFB) licences on Wednesday, impacting several fintechs including Sycamore, Now Now, and OurPass, which had acquired these licences to enter deposit-taking and lending. The CBN emphasized that a licence requires active financial intermediation and continuous regulatory compliance, not just acquisition. The NDIC has already begun the liquidation process, warning customers to cease transactions.
Why it matters
This regulatory cleanup sends a clear signal that the CBN is closing the 'license-as-a-shortcut' loophole. For APS, this reinforces the critical importance of vetting financial partners in Nigeria. The instability of fintechs relying on shaky regulatory footing could create systemic risk in the payment ecosystem, affecting settlement reliability and partner stability. This action will likely drive a flight to quality towards more capitalized and demonstrably compliant institutions.
A review of the Central Bank of Nigeria's directives in the first half of 2026 reveals a major push for tighter control over the financial system. Key mandates include the requirement for all locally generated payment data to be stored within Nigeria by January 1, 2027, mandatory device binding for digital services, and enhanced Ultimate Beneficial Ownership (UBO) disclosure rules.
Why it matters
These directives collectively signal a fundamental shift in Nigeria's regulatory environment towards stricter, continuous compliance. The data localization rule is particularly significant for any provider using foreign cloud infrastructure (like AWS), as it will necessitate costly and complex data migration. For APS, this means anticipating higher compliance costs and infrastructure adjustments to operate in Nigeria.
Effective Wednesday, Kenya's Finance Act 2026 has imposed a 16% VAT on digital payment processing fees for over 40 licensed providers, including M-Pesa, Airtel Money, and Pesapal. The legislation also introduces a 16% withholding tax on interchange, merchant service, and network fees for digital platforms. This new tax compounds existing excise duties on digital transactions.
Why it matters
This is a direct and significant cost increase for any payment provider operating in Kenya. It will inevitably raise the cost of digital transactions for merchants and consumers, potentially dampening digital payment adoption. For APS, this immediately impacts the cost structure and competitiveness of its services in the Kenyan market, requiring a re-evaluation of pricing models and potential strategies to absorb or pass on these new taxes to clients.
Vodacom Group has completed its acquisition of an additional 20% effective stake in Safaricom, raising its total shareholding to approximately 55%. The move, which included buying the Kenyan government's 15% stake, gives Vodacom majority control over the operator of the dominant M-Pesa mobile money platform.
Why it matters
This consolidation of control over Safaricom by Vodacom could lead to significant strategic shifts for M-Pesa. For any payment gateway integrating with M-Pesa, this is a key development to watch. Potential changes in API strategy, pricing, cross-border integration, and product roadmap could have direct consequences for merchant services and the broader East African payment landscape.
Visa, M-Pesa, and pan-African payments company Onafriq have launched a pilot in the Democratic Republic of Congo (DRC) to test using stablecoins for settling cross-border mobile money transactions. The initiative aims to make international payments faster and cheaper by bridging local mobile money systems with global payment networks.
Why it matters
This is a significant, real-world test of stablecoins as a settlement rail in Africa, involving the continent's most dominant mobile money player. If successful, this model could provide a blueprint for dramatically improving the speed and cost of cross-border settlement for merchants. For APS, this pilot is a crucial one to watch, as it could signal a major shift in the underlying infrastructure for intra-Africa and international payments, bypassing traditional corresponding banking routes.
Virtual asset providers in Kenya are challenging a proposed National Treasury regulation that would require 30% of stablecoin issuance funds to be held in local commercial banks. Firms argue this rule should not apply to foreign-issued stablecoins like USDC or USDT to avoid deterring international operators and creating duplicative regulatory burdens.
Why it matters
This dispute is critical for the future of stablecoins as payment rails in Kenya. Imposing local reserve requirements on globally-issued stablecoins could render them operationally unviable in the market, stifling a potential avenue for cheaper and faster cross-border payments. The outcome will directly impact the feasibility of using stablecoins for merchant settlement and forex in Kenya.
Nairobi-based startup Daya has raised a $2.4 million pre-seed round led by Hivemind Capital to build infrastructure for cheaper and faster cross-border payments using stablecoins. The company plans to use the funding for team expansion, ensuring compliance, and entering new markets across Africa.
Why it matters
This funding into a Nairobi-based stablecoin infrastructure player is a strong signal of investor confidence in using crypto rails to solve African cross-border payment challenges. Daya is now a direct competitor or potential partner to watch. Their focus on compliance and market-by-market entry is a playbook APS should monitor closely.
Wamkele Mene, Secretary-General of the AfCFTA Secretariat, is calling for accelerated ratification of the AfCFTA Protocol on Digital Trade. He highlighted that the protocol is designed to facilitate integrated digital payments and harmonize regulations, reducing dependence on foreign currencies through systems like the Pan-African Payment and Settlement System (PAPSS). Nigeria has reportedly secured parliamentary approval for ratification.
Why it matters
The operationalization of this protocol and PAPSS is the long-term strategic prize for simplifying pan-African commerce. While progress has been slow, each ratification step moves closer to a future where cross-border settlement is less reliant on non-African correspondent banks and hard currencies. This directly impacts the core challenge of forex repatriation that APS and its merchants face.
According to the 2026 Chargeback Field Report from Chargebacks911, 83% of enterprise merchants have seen a rise in 'friendly fraud' over the last three years. A separate report indicates 38% of merchants are now passing these costs on to consumers via higher prices. Friendly fraud, where customers dispute legitimate charges, reportedly accounts for 75% of all chargebacks.
Why it matters
This highlights a significant and growing pain point for ecommerce merchants that directly impacts their bottom line. The data suggests that friendly fraud is not a niche problem but a systemic issue driving up costs across the board. For APS, providing robust tools and data to help merchants effectively fight illegitimate chargebacks (e.g., via Visa's Compelling Evidence 3.0) is an increasingly critical value-add.
Visa has introduced six new AI-powered tools aimed at making the credit card charge dispute process more efficient and transparent for merchants, issuers, and acquirers. The tools offer capabilities like preemptive dispute management, AI-generated responses, predictive models, and document summarization, all accessible through a centralized platform.
Why it matters
This marks a major operational shift by a core network to tackle the costly and time-consuming chargeback process. For a payment gateway like APS, these tools could be a game-changer, offering the potential to significantly reduce chargeback rates, lower operational overhead, and improve merchant satisfaction through faster resolution. It signals a move toward proactive, data-driven dispute management becoming the industry standard.
Regulatory Compliance Gets Sharper Teeth Regulators in Nigeria and Kenya are moving from guidance to enforcement. Nigeria's CBN is revoking fintech-acquired microfinance bank licenses, while Kenya has imposed a new 16% VAT on digital payment processing fees. Both actions raise the stakes and costs for operating in these key markets.
Stablecoins Move from Pilot to Plumbing Stablecoins are being tested as core infrastructure for cross-border settlement. The Visa/M-Pesa pilot in the DRC is a prime example, aiming to solve real-world friction in mobile money interoperability, while Standard Chartered's institutional USDC service signals mainstream integration.
AI Enters the Chargeback Arena Visa's new AI tools for dispute resolution and Inscribe's rapid document fraud detection show AI is being deployed to tackle specific, costly operational problems in payments. The focus is shifting from broad hype to targeted applications for reducing chargebacks and manual review.
The South African Traveller Declaration Goes Live SARS has mandated a new online declaration system for all travellers, effective July 1. While intended to modernise customs, reports of immediate technical glitches highlight the friction new digital compliance systems can create for cross-border commerce.
Friendly Fraud's Rising Toll New reports show 'friendly fraud'—where customers dispute valid charges—is increasing, forcing merchants to pass costs to consumers. This trend underscores the growing importance of sophisticated chargeback prevention and evidence submission tools for payment gateways.
What to Expect
2026-07-01—Effective date for CBN's revocation of 46 microfinance bank licenses in Nigeria.
2026-07-01—Effective date for Kenya's 16% VAT on digital payment processing fees.
2026-07-01—Effective date for SARS' mandatory online traveller declaration system in South Africa.
2027-01-01—Uganda's new limits on cash withdrawals and cheque transactions take effect.
2027-01-01—Deadline for CBN's data localization mandate in Nigeria.
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