Today on The Settlement Layer: Sweeping new compliance frameworks are landing across Africa’s largest economies, from a dedicated crypto audit unit in South Africa to strict structural boundaries for Nigerian fintechs. We also track Afreximbank's expanding physical strategy for pan-The Settlement Layer settlements, and an Apple Pay token update changing the mechanics of recurring billing.
On Wednesday, the South African Revenue Service (SARS) published comprehensive draft guidance for the taxation of crypto assets and announced the formation of a new Crypto Revenue Augmentation Unit to audit an estimated 6 million users. The proposed rules, open for public comment until August 31, classify crypto as intangible assets, not foreign currency, making most transactions—including crypto-to-crypto swaps—taxable events. Tax rates would vary from 18% to 45% depending on whether gains are deemed income or capital.
Why it matters
This is a landmark move toward formalizing crypto regulation in Africa's most developed economy and will have significant operational implications for any payment provider touching digital assets. For APS, this provides much-needed, albeit strict, clarity for structuring any future stablecoin settlement or crypto-to-fiat conversion services for South African merchants. The creation of a dedicated audit unit signals serious enforcement intentions, meaning compliance and meticulous record-keeping will be non-negotiable for merchants and their payment partners.
The South African Reserve Bank (SARB) is considering a major overhaul of its interest rate framework, which could include eliminating the prime lending rate system and renaming the repo rate. The prime rate is the benchmark for over R3.2 trillion in loans, and any changes would aim to create a more flexible lending environment.
Why it matters
This potential reform would be a fundamental change to South Africa's financial plumbing. Scrapping the prime rate would affect the cost of credit for businesses and consumers, influencing everything from merchant financing to operational loans. For a payment gateway operating in ZAR, such a foundational shift in the country's interest rate architecture would require a thorough review of financial models, risk assessments, and partnerships.
On Sunday, the Central Bank of Nigeria (CBN) released exposure drafts for revised guidelines on Financial Holding Companies (HoldCos) that would impose stricter governance and operational separation between banks and their subsidiaries. Key proposals include a 20% capital buffer requirement for HoldCos and restrictions on shared services and interlocking directorships between a bank and its non-bank affiliates, which often include payment service providers.
Why it matters
These proposed reforms could significantly reshape the structure of Nigeria's largest financial groups, impacting many fintechs and payment processors that operate as subsidiaries. For payment gateways, this signals a move towards greater regulatory scrutiny and potential for increased capital requirements and operational independence. While aimed at enhancing financial stability, the changes could increase compliance costs and reduce efficiencies previously gained from shared services within a HoldCo structure.
Effective July 1, Ecobank Nigeria has implemented new charges for foreign currency transfers within the bank. Customers will now pay a fee of 0.3% plus 7.5% VAT on the transfer amount. The new charges apply to transfers between different customers' domiciliary accounts but not to transfers between an individual's own accounts. The move comes as the CBN tightens forex regulations and penalizes banks for undocumented transactions.
Why it matters
The introduction of new fees by a major pan-African bank directly increases the cost of moving foreign currency within Nigeria. This move, likely a response to heightened regulatory pressure from the CBN, will impact businesses that rely on domestic FX transfers for operations and trade. For payment providers, it's a clear signal of rising operational costs in the Nigerian banking system, which may eventually be passed on to merchants.
Afreximbank is escalating the push for its Pan-African Payment and Settlement System (PAPSS) we've been tracking, with President Dr. George Elombi announcing an upcoming 'PAPSS card.' While reiterating the network's previously cited footprint of 190 commercial banks across 28 countries, Elombi also called for a new African-owned credit rating agency to provide more accurate economic assessments.
Why it matters
The high-level push for PAPSS, coupled with the upcoming launch of a dedicated card, signals renewed momentum for the pan-African settlement initiative. For a cross-border payment gateway, wider PAPSS adoption is critical as it promises to streamline local currency settlements across the continent, directly addressing the cost and complexity of managing multiple African currency corridors and reducing dependence on USD/EUR settlement rails.
President Tinubu on Sunday signed the National Identity Management Commission (NIMC) Act 2026, a landmark law that repositions Nigeria's national identity system as core economic infrastructure. The Act establishes NIMC as the nation's Root Certification Authority and mandates the National Identification Number (NIN) as the primary standard for authentication across public and private sectors. It also introduces stronger data privacy protections and stricter penalties for identity fraud.
Why it matters
A robust, unified digital identity framework is a foundational layer for secure digital commerce. This development is a significant step toward streamlining merchant and customer KYC processes in Nigeria, which could dramatically reduce onboarding friction and combat identity-related fraud. For a payment provider like APS, a stronger national ID system provides a more reliable anchor for risk assessment and verification, improving the integrity of the entire payments ecosystem.
The clash we noted over Kenya's proposed stablecoin reserve rules is coming into sharper focus. The National Treasury's draft regulations formalize the requirement that issuers hold at least 30% of reserves in local commercial banks, and further stipulate the remainder must also be held domestically. The move is explicitly framed as part of Kenya's effort to exit the FATF grey list, though industry bodies reiterate warnings that it could trap liquidity and inflate costs for global operators.
Why it matters
This is a significant attempt by a major African economy to assert sovereign control over the stablecoin market. The localization requirement directly impacts the business model of global stablecoin providers and could increase the cost and complexity of offering stablecoin-based services in Kenya, including for cross-border payments and remittances. It signals a broader regulatory trend of domesticating digital asset liquidity.
Customers of Nigeria's Providus Bank are reporting a surge in unauthorized card transactions, which appear to be linked to a major data breach in March 2026 that exposed sensitive information from several Nigerian financial institutions. The incidents have reignited concerns over data security in the country's banking sector. The Nigeria Data Protection Commission (NDPC) had previously launched an investigation into the breach, but its findings have not yet been made public.
Why it matters
This incident provides a concrete risk signal for any acquirer processing Nigerian-issued cards. It underscores the elevated risk of card-not-present fraud and highlights the downstream impact of security lapses at financial institutions. Payment gateways should anticipate a potential increase in chargebacks and fraudulent transaction attempts from the affected BIN ranges and review their fraud rules accordingly.
Crypto payments firm MoonPay has acquired Entendre, a maker of AI-powered accounting tools, to automate the financial backend for businesses using stablecoins. The move, announced Monday, is designed to streamline complex processes like reconciliation, treasury management, and financial closing for high-volume, multi-currency stablecoin operations, a concept MoonPay calls 'agentic finance'.
Why it matters
This acquisition highlights a key bottleneck for enterprise adoption of crypto rails: the operational overhead of accounting and reconciliation. By integrating AI to automate these back-office tasks, MoonPay is tackling a significant friction point. This could make stablecoins a more viable and scalable option for large businesses, accelerating their use as a settlement layer and signaling the maturation of the crypto payments stack beyond simple transactions.
On June 24, Shopify made its B2B Native Checkout available to all Shopify Plus merchants, integrating wholesale commerce features directly into its core platform. The new functionality supports company-specific accounts, net payment terms (e.g., Net 30, Net 60), volume-based pricing, and purchase order workflows, eliminating the need for many third-party apps or separate B2B storefronts.
Why it matters
This is a major platform shift for one of the world's largest ecommerce ecosystems. By bringing complex B2B payment workflows into its native checkout, Shopify is streamlining operations for a huge cohort of merchants. For payment gateways, this creates a new, standardized integration point for B2B features and signals that what was once a niche is now a core part of the platform, requiring payment providers to adapt their offerings to fit these new native workflows.
Apple has quietly expanded its Apple Pay Merchant Token specification, enabling ecommerce merchants to store tokenized card credentials directly for recurring billing and smoother rebilling. This update, which went live around June 30 and is being adopted by gateways like Stripe and Adyen, aims to reduce payment decline rates and improve cart-abandonment recovery flows by giving merchants more control over stored credentials, independent of the card networks' own tokenization systems.
Why it matters
This is a significant shift in the stored credential landscape. By allowing merchants to hold their own Apple Pay tokens, it provides a powerful tool to combat involuntary churn from failed recurring payments—a major issue for subscription businesses. It also provides richer fraud prevention signals. For APS, this development creates a new technical requirement and an opportunity to offer merchants enhanced reliability for recurring revenue streams.
Amazon Web Services (AWS) is making strategic workforce adjustments, including some layoffs, as it doubles down on investment in AI infrastructure and services. Despite the cuts, AWS reported strong Q1 2026 revenue growth of 28% year-over-year and projects continued expansion driven by its AI and machine learning offerings.
Why it matters
As a key infrastructure partner for African Payment Solutions, AWS's strategic pivot towards AI has direct implications. It signals where the platform's future innovation and resources will be concentrated, likely resulting in more powerful and accessible AI services. This reinforces the need for APS's tech team to stay aligned with AWS's evolving capabilities to leverage new tools for services like fraud detection and operational automation.
Regulators Formalize Crypto Taxation South Africa's revenue service (SARS) has released comprehensive draft guidelines for taxing cryptocurrency transactions, treating them as intangible assets. This move, which includes the creation of a dedicated audit unit, signals a major step towards formalizing and enforcing tax compliance in one of Africa's largest crypto markets. Kenya is also moving to localize stablecoin reserves, indicating a broader trend of bringing digital assets under stricter domestic financial control.
Nigeria Tightens Financial System Governance The Central Bank of Nigeria (CBN) is implementing significant reforms to its financial system. New proposals for bank holding companies aim to create clearer separation between banking and non-banking subsidiaries, potentially increasing capital requirements and altering operational structures for fintechs. This comes alongside new fees on FX transfers and a surge in VAT collection from foreign currency payments, pointing to a concerted effort to increase oversight and revenue capture.
Pan-African Payment Rails Gain Political Momentum Efforts to build continent-wide settlement systems are accelerating, with high-level advocacy for the Pan-African Payment and Settlement System (PAPSS). Afreximbank and political leaders are pushing for wider adoption to reduce reliance on external currencies for intra-African trade. This is complemented by initiatives to harmonize customs technology across the continent to support the AfCFTA.
The Fraud Landscape Evolves with AI and System Exploits New fraud typologies are emerging that target both consumers and merchants. In Nigeria, a data breach at a major bank has led to a wave of unauthorized card transactions. Concurrently, a new scam in India sees fraudsters exploiting UPI's chargeback mechanism, a pattern that could migrate to African mobile money systems. Meanwhile, a new report details how organized criminal groups are using agentic AI to automate sophisticated attacks.
Major Platforms Build Out Native B2B and Stored Credential Features E-commerce and payment giants are enhancing their core platforms with features that directly impact merchants. Apple Pay is expanding its merchant token system to allow for merchant-stored credentials, aiming to improve recurring billing success rates. Shopify has also rolled out a native B2B checkout, integrating wholesale payment terms and workflows, reducing the need for third-party apps.
What to Expect
2026-07-31—The 3rd Business Journal Fintech & Financial Inclusion Roundtable will be held in Nigeria, with PufferPay CEO Emmanuel Ovaga as keynote speaker.
2026-08-31—Deadline for public feedback on South Africa's draft crypto asset tax guidance published by SARS.
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