Today on The Settlement Layer: the SARB is stepping in to nationalize the cost of physical cash management across South Africa, proposing to treat the cash ecosystem as public infrastructure. At the same time, regional settlement networks are drawing in new assets, with Angola's kwanza formally integrating into SADC rails and Kenya cutting capital thresholds to keep stablecoin issuers onshore.
The South African Reserve Bank (SARB) is proposing a major overhaul of the country's physical cash system to reduce a reported $5.5 billion annual cost burden on consumers. The 'Cash Smart Strategy' aims to treat cash as national public infrastructure, potentially leading to a national cash utility, an expansion of white-label ATMs, and licensing for non-bank cash operators to improve efficiency, especially in rural areas.
Why it matters
While the digital economy grows, the SARB is reinforcing the importance of cash as a resilient public good. This move to centralize and subsidize cash infrastructure could influence the cost-benefit analysis for merchants considering going cashless. For a payment gateway, it underscores that even in a market with sophisticated digital options like instant EFT, a hybrid strategy that accommodates a modernized cash ecosystem will remain critical for financial inclusion and reaching all customer segments.
The South African Reserve Bank (SARB) announced that it will integrate Angola's kwanza into the SADC (Southern African Development Community) regional settlement system on Monday. The move is designed to improve payment efficiency, reduce transaction costs, and bolster regional trade between two of the continent's largest economies.
Why it matters
The inclusion of the kwanza in a formal regional settlement system is a significant step toward reducing friction in intra-African trade. This directly impacts cross-border settlement mechanics, potentially simplifying forex flows and reducing reliance on hard currencies like the USD for regional transactions. For APS, this development could eventually open up a more streamlined settlement corridor for merchants operating in or selling to Angola.
Nigerian fintech startup Duplo has raised $13 million to expand its AI-powered platform that automates financial operations—like invoicing, reconciliation, and payment workflows—for African businesses. The company, which recently expanded from Nigeria into South Africa, aims to build a pan-African financial operating system, addressing widespread inefficiencies from manual back-office processes.
Why it matters
Duplo's funding and expansion highlight the significant, underserved market for B2B financial automation in Africa, moving beyond just payment acceptance. For APS, this validates the market for tools that solve core operational pain points for merchants. Duplo's focus on integrating with diverse local financial infrastructures across countries offers a playbook—and a potential competitor—in the race to become the essential financial OS for African businesses.
A new study from Savannah Software Solutions finds that 67% of Kenyan online shoppers abandon their carts before completing a purchase. The primary reasons cited are a lack of preferred payment options like M-Pesa, slow page-load times, hidden fees, complex checkout flows, and sites not optimized for mobile devices.
Why it matters
This data quantifies the direct revenue loss from poor checkout experiences in Kenya. It provides a powerful, data-backed argument for merchants to prioritize seamless payment integration and mobile optimization. For APS, this is a key sales tool, demonstrating that solving payment friction isn't a 'nice-to-have' but a critical factor in a merchant's survival and growth.
Fintech firm PawaPay announced it has processed three billion mobile money transactions, with daily volumes doubling to five million. The company attributes the growth to a shift from peer-to-peer transfers to business-driven use cases, noting that merchant payments were the fastest-growing segment, rising 42% year-on-year to $155 billion in 2025.
Why it matters
These figures confirm the maturation of mobile money into a core B2B and B2C payment rail across Africa. The rapid growth in merchant payments specifically underscores the critical importance of robust, scalable mobile money integrations for any payment gateway serving the continent. The market is clearly shifting towards business-led volume, not just P2P transfers.
Building on the AI-powered 'Anti-Scam Shield' and behavioral architecture we covered earlier this week, OPay executives have detailed how their system balances friction with security. Instead of blanket challenges, the platform employs a dynamic risk-based model that triggers active interventions—like facial verification—only for high-risk scenarios, allowing millions of daily transactions to pass with low friction.
Why it matters
OPay's disclosures provide a rare look into the production-grade AI stack of a leading African payment provider. Their strategy of using AI to balance security with a low-friction user experience—applying extra checks only when risk scores demand it—is a practical model for any payment gateway. For your team, this is a concrete example of a competitor's AI tooling and risk management philosophy in your core market.
Australian e-commerce group Kogan boosted its payment approval rate to over 98% and identified AUD $1.5 million in annual savings after implementing AI-powered fraud and risk tools from Riskified. The platform helped Kogan better identify policy abuse, such as misuse of promotions, and reduce manual review workload for its card-not-present transactions.
Why it matters
This is a concrete, quantified example of AI's impact on a core payment metric: authorization rates. It shows how moving beyond basic fraud detection to tackle more nuanced issues like policy abuse can deliver measurable ROI. For a payment gateway, this case study is evidence of the value of offering advanced, AI-driven risk tooling to merchants, which can directly translate into recovered revenue and lower operational costs.
Following up on Kenya's formal gazetting of VASP regulations we tracked recently, the Treasury has bowed to industry pressure and reduced the proposed minimum capital requirements for crypto firms by up to 40%. Under the revised rules, stablecoin issuers will now need Ksh300 million (approx. $2.3M), down from the originally proposed Ksh500 million, lowering the barrier to entry across all VASP categories.
Why it matters
This adjustment signals that Kenyan regulators are attempting to strike a balance between oversight and fostering innovation. The lower barrier to entry could encourage more firms to operate within the formal regulatory framework, potentially leading to a more competitive and robust market for crypto payment rails and stablecoin-to-fiat conversion services—critical infrastructure for merchants using crypto for settlement.
Central bank governors from the East African Community (EAC) have reaffirmed their commitment to launching a single regional currency by 2031. During a meeting on July 24, the governors reviewed the EAC Cross-Border Payment System Masterplan, which is designed to modernize payment infrastructure and lower transaction costs, but acknowledged that member states are behind schedule on meeting macroeconomic convergence targets.
Why it matters
While the 2031 single currency goal remains ambitious, the ongoing work on the Cross-Border Payment System Masterplan is more immediately relevant. Progress on harmonizing payment infrastructure and improving interoperability could reduce costs and complexity for cross-border settlement within the EAC, even if the single currency deadline slips. The acknowledged delays in convergence, however, temper expectations for rapid change.
Nigeria's Central Bank (CBN) has announced it will no longer provide direct intervention funding to the manufacturing sector, shifting that responsibility to specialized institutions like the Bank of Industry. The move comes amid a broader credit squeeze and has sparked concern from manufacturing associations about the impact on industrial investment and capacity.
Why it matters
This policy shift reinforces the CBN's focus on its core monetary policy mandate and away from development finance. However, it tightens the credit environment for a key segment of the economy. For payment providers, this could mean that merchant clients in the manufacturing sector face greater capital constraints, potentially affecting their ability to invest in growth and new technology integrations.
In a complex week for Ethiopian digital finance, the industry launched the Ethiopian Digital Financial Service Providers Association, a trade body with 18 founding members including banks and payment gateways, aimed at unifying the sector's voice in policy discussions. This move toward formalization comes as the National Bank of Ethiopia (NBE) simultaneously broadened its ban on virtual assets, prohibiting all related activities like exchange, transfer, and custody services unless explicitly authorized.
Why it matters
This dual development shows a market attempting to professionalize traditional digital finance while the regulator aggressively closes the door on the crypto economy. The new association could create a more predictable environment for payment gateways, but the NBE's hardline stance on crypto signals a fragmented and challenging regulatory landscape for anyone looking to offer services that bridge the two worlds.
South Africa Overhauls Payment Infrastructure, Both Digital and Physical The South African Reserve Bank is pursuing a dual strategy: modernizing its physical cash system by treating it as public infrastructure to cut costs, while simultaneously expanding its digital cross-border capabilities by integrating Angola's kwanza into the SADC payment system.
AI-Powered B2B Automation Gains Traction in Africa Following a $13 million funding round, Nigerian fintech Duplo is expanding its AI-powered financial operations automation to South Africa, signaling strong investor appetite and a growing market need for tools that streamline B2B invoicing, reconciliation, and payments for African merchants.
Kenya's Regulatory Landscape for Digital Assets and Payments Takes Shape Kenya is advancing on multiple regulatory fronts. The Treasury has lowered capital requirements for crypto firms to spur investment, while separate legislative proposals aim to recognize crypto and social media income as loan collateral. Concurrently, a new study highlights that 67% of online shoppers abandon carts due to payment friction, underscoring the urgent need for better payment integrations like M-Pesa.
West African Economies Deepen Digital and Trade Integration Nigeria is pushing forward with its PSV 2028 plan to become a regional payments hub, while also cooperating with Ghana to advance the ECO single currency. At the same time, a new court ruling in Nigeria strengthens local ownership rules for digital lenders, reflecting a broader push to shape digital financial services to benefit domestic economies.
Fraud Prevention Evolves with AI and Better Data As 'friendly fraud' continues to be a major source of chargebacks, case studies show merchants are achieving approval rates above 98% by using AI-powered risk tools from vendors like Riskified. Concurrently, new EMV 3DS2 standards are providing issuers with more data points to reduce friction and better assess risk for card-not-present transactions.
What to Expect
2026-07-29—The 7th Africa Emerging Markets Forum begins in Abuja, with CBN Governor Olayemi Cardoso and WTO DG Ngozi Okonjo-Iweala headlining discussions on economic resilience and cross-border payments.
2026-08-01—CBN deadline for Point-of-Sale (PoS) geo-fencing compliance.
2026-08-11—SARB's new, more detailed Balance of Payments (BoP) reporting codes for forex transactions take effect.
2026-11-04—Deadline for existing Virtual Asset Service Providers (VASPs) in Kenya to secure licenses under the new regulatory framework.
2026-11-14—Deadline for ISO 20022 compliance for cross-border payments, affecting data structure for international transactions.
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