Safaricom is aggressively cutting M-PESA merchant fees this morning, escalating the fight for SME payment volumes just as Kenyan banks push back on proposed revenue-based levies. Down south, the SARB is preparing to close provisional tax loopholes and tighten reporting duties, while globally, Mastercard is re-architecting its fraud and settlement infrastructure specifically to handle AI-to-AI transactions.
The South African Revenue Service (SARS) is drafting new tax legislation aimed at tightening provisional tax rules and significantly expanding the reporting obligations of banks. The proposed changes would require banks to report payments they suspect are linked to tax offences, a move designed to enhance transaction monitoring and crack down on non-compliance.
Why it matters
This move signals a more aggressive compliance posture from SARS, directly impacting the operational environment for payment processors and merchants in South Africa. Increased bank reporting duties will place greater scrutiny on all financial flows, potentially raising compliance costs and requiring more robust documentation for transactions. For a payment gateway, this reinforces the need for meticulous record-keeping and transparent reporting to avoid flagging legitimate merchant settlements as suspicious.
Echoing SARB Deputy Governor Fundi Tshazibana's recent warnings about the 'black box' risks of crypto, Governor Lesetja Kganyago reiterated the central bank's cautious regulatory approach at Friday's annual general meeting. While acknowledging stablecoins' utility for faster cross-border payments, he defended the need for careful risk management and equivalent regulatory standards to prevent loopholes for financial crime or capital flight.
Why it matters
The Governor's comments confirm the SARB's consistent 'balance risk and innovation' stance as it develops its formal crypto regulatory framework. For payment providers, this means that while the door is open for stablecoin use cases, any implementation in South Africa will be subject to stringent, bank-like regulatory scrutiny. The emphasis on preventing capital control evasion is a key signal for anyone building cross-border settlement solutions involving the Rand.
Alongside the rollout of its consolidated Global Merchant Audit Program (GMAP), Mastercard is fundamentally redesigning its fraud detection systems to handle the emerging wave of 'agentic commerce.' Chief AI officer Greg Ulrich outlined a new five-layer trust infrastructure featuring concepts like 'agentic identity' and 'verifiable intent' to securely manage AI-initiated bot transactions at scale, initially targeting the B2B procurement sector.
Why it matters
This represents a foundational shift in payment security, moving beyond authenticating a human to verifying the identity and intent of a machine. For a B2B payment gateway, this is a critical development to track. The standards and infrastructure Mastercard builds will likely become industry-wide, and readiness to support secure AI-to-AI transactions for use cases like automated procurement will become a key capability for payment providers in the near future.
Rohit Chauhan, the former EVP of AI & Fraud Solutions at Mastercard, argues that the effectiveness of AI in fraud detection hinges more on the underlying data architecture than the sophistication of the models themselves. He emphasizes that fraud is a network problem, and only a connected data environment that provides broad context—linking disparate signals across transactions, accounts, and merchants—can enable AI to perform effectively.
Why it matters
This is a crucial insight for any team building or deploying fraud prevention systems. It suggests that the primary investment shouldn't just be in acquiring advanced AI models, but in engineering a data infrastructure that can feed those models the rich, contextualized data they need. For a lean B2B payments team, this reinforces that a focus on high-quality, interconnected data may yield better ROI in fraud prevention than a singular focus on complex algorithms.
Adding to the global surge in 'friendly fraud' we've been tracking—which now accounts for up to 86% of e-commerce chargebacks—a new analysis of the Australian chargeback system shows banks are consistently siding with consumers even when merchants provide compelling evidence. The liability gap is now being compounded by the rise of 'agentic commerce,' creating unresolved legal questions about who absorbs the cost when an AI makes an unauthorized or disputed purchase.
Why it matters
This highlights a systemic risk for all e-commerce merchants: the chargeback process is often structurally biased against them. For a payment gateway, this is a core operational challenge for your merchants. The looming complexity of AI-driven payments, where transaction liability is not yet clearly defined, threatens to exacerbate this problem, necessitating proactive strategies and clearer risk management frameworks to protect merchant revenue.
Following Visa's recent rollout of an enterprise stablecoin platform, Mastercard is moving to vertically integrate its own settlement layer by acquiring crypto infrastructure provider BVNK for $1.5 billion. The deal, which includes a potential $300 million earnout, is designed to automatically convert merchant stablecoin payments into local fiat currency, addressing the core volatility friction point we've been tracking in B2B cross-border adoption.
Why it matters
This acquisition is a major signal that the largest payment networks see stablecoin settlement not as a niche, but as a core component of future payment infrastructure. By buying, rather than just partnering with, a firm like BVNK, Mastercard is vertically integrating the crypto-to-fiat conversion layer. This will accelerate merchant adoption of crypto payments by removing the complexity and volatility risk, creating a significant new competitive dynamic for payment gateways that offer similar services.
Countering recent industry reports that championed local-currency stablecoins as a frictionless panacea for African trade, a new Bank of Italy study published on July 30 finds that stablecoin-based remittances are not consistently cheaper or faster than traditional methods across ten payment corridors, including South Africa. The analysis points out that the primary friction lies not in the blockchain execution, but in the delays and costs of the local fiat on- and off-ramps.
Why it matters
This empirical data provides a crucial reality check on the stablecoin narrative. It underscores that for stablecoins to be a viable payment rail, the efficiency of the underlying blockchain is less important than the quality and cost of the local crypto-to-fiat conversion infrastructure. For a payment gateway operating in Africa, this highlights that solving the 'last mile' of fiat settlement is the most critical piece of the puzzle for making crypto payments practical for merchants.
Following the aggressive PesaLink fee cuts from a coalition of 19 Kenyan banks we tracked last week, Safaricom is retaliating by slashing its own M-PESA merchant services starting in early August. Customer-to-business payments up to KSh 200 via Pochi La Biashara will be free for a 90-day promotional period beginning August 1, while the free collection limit for Lipa na M-PESA Buy Goods tills will more than double to KSh 500 from August 7.
Why it matters
This confirms a full-blown price war for SME payment volume in Kenya. Lower M-PESA fees are a direct defense against the banking sector's recent push for cheaper instant payments, potentially forcing third-party payment gateways to adjust their own pricing and acquisition models to remain competitive.
Central Bank of Kenya (CBK) Governor Kamau Thugge is defending a controversial proposal to replace banks' flat annual licensing fee with a levy based on gross revenue. Speaking before a parliamentary committee on Friday, he argued the new fee—starting at 0.13% of gross revenue—is necessary to fund the CBK's enhanced supervisory capacity. Lawmakers and the Kenya Bankers Association counter that the move will drastically increase costs for banks, which will likely be passed on to consumers and merchants, and could create barriers for new market entrants.
Why it matters
This proposed change in bank fee structure could have significant downstream effects on the entire Kenyan payment ecosystem. If banks' operating costs rise substantially, they may increase transaction fees for services that payment gateways rely on, including mobile money integrations and bank transfers. This could impact settlement costs and the pricing of payment services for your merchants.
Dr. Rakiya Yusuf, the CBN's Director of Payments System Supervision, has publicly urged financial institutions to accelerate their adoption of the new ISO 20022-compliant National Payment Stack (NPS) and to ensure full compliance with the directives for PoS terminal geo-tagging and geo-fencing. The call comes just ahead of the August 1, 2026 deadline for the PoS mandates. The push aims to modernize Nigeria's payment architecture and strengthen anti-fraud measures.
Why it matters
The CBN's public reinforcement of these deadlines signals that enforcement is imminent. For any payment provider in Nigeria, compliance with PoS geo-fencing is now a non-negotiable operational requirement. Longer-term, integration with the new National Payment Stack will be critical, as it promises richer transaction data and improved interoperability, forming the next-generation rails for the country's payment system.
Amazon's internal custom silicon division, which designs chips like Graviton for general computing and Trainium for AI model training, has grown into a major force, surpassing a $25 billion annual revenue run rate with triple-digit year-over-year growth. The company states its chips offer superior price-performance for cloud workloads on AWS, with 98% of its top EC2 customers now using Graviton processors.
Why it matters
As a heavy user of AWS, this trend is directly relevant to your infrastructure costs. The increasing performance and adoption of Amazon's custom Graviton chips for general-purpose workloads present a clear opportunity to optimize your cloud spend. Migrating services to Graviton-based instances could yield significant cost savings and performance improvements for your payment processing infrastructure.
Expanding on the $1.2 billion in CIPS volume Standard Bank Group reported earlier this month, its subsidiary Stanbic Bank Kenya has now gone live with direct Renminbi (RMB) settlement. Kenya joins five other African markets on the platform, allowing local businesses to settle payments with Chinese partners directly in Yuan and bypass the US Dollar intermediary entirely.
Why it matters
This is a significant infrastructure upgrade for the Africa-China trade corridor. By eliminating the USD as an intermediary currency, merchants can reduce forex conversion fees, mitigate exchange rate volatility, and accelerate settlement times. For a payment gateway, this opens up a more efficient rail for settling transactions related to goods sourced from or sold to China, a major part of the African e-commerce supply chain.
AI-driven 'Agentic Commerce' Reshapes Fraud and Liability Models The rise of AI agents initiating B2B payments is forcing a rethink of fraud detection and liability. Major card networks are re-architecting their systems for 'agentic identity' and 'verifiable intent', while unresolved questions around dispute liability for AI-driven transactions are creating new risks for merchants.
Kenya's Payment Landscape Heats Up with Fee Wars and Regulatory Scrutiny Competition is intensifying in Kenya as Safaricom slashes M-Pesa merchant fees to boost SME adoption. Simultaneously, the Central Bank is defending a controversial proposal to switch from flat licensing fees to a revenue-based levy for banks, potentially increasing costs that could be passed down to merchants and consumers.
South Africa Tightens Regulatory Grip on Financial Flows The South African Reserve Bank is advancing its crypto regulatory framework, aiming to treat crypto assets like traditional finance while signaling a cautious approach. Concurrently, SARS is moving to close provisional tax loopholes and expanding bank reporting duties to better monitor financial transactions for tax compliance, tightening the overall regulatory environment.
Stablecoin Infrastructure Matures with Focus on Real-World Utility The narrative around stablecoins in Africa is shifting from hype to practical application. A new Bank of Italy study questions their cost-effectiveness for remittances, highlighting on/off-ramp friction as the key bottleneck. Meanwhile, Tether is exploring tokenized capital markets in Kenya, and other platforms are integrating local payment methods like M-Pesa to improve crypto-to-fiat liquidity.
PAPSS Integration Continues as Commercial Banks Go Live The Pan-African Payment and Settlement System (PAPSS) is moving from central bank agreements to commercial bank rollouts. Prudential Bank in Ghana has now integrated PAPSS directly into its mobile app, allowing customers to make instant cross-border payments in local currencies, a crucial step in making the system accessible to SMEs.
What to Expect
2026-08-01—Deadline for Nigerian financial institutions to comply with CBN's PoS geo-fencing and geo-tagging directives.
2026-08-07—Safaricom's reduced M-PESA merchant fees for Lipa na M-PESA and Business Tills take effect in Kenya.
2026-08-07—Fintech Regulation & Compliance Conference begins in South Africa.