Today on The Settlement Layer, the South African Reserve Bank is cementing public control over its national clearing house. Meanwhile, Safaricom fires another salvo in Kenya's escalating SME payments war, and Zimbabwe signals a policy pivot toward formalizing the crypto economy.
Expanding on the M-PESA tariff reductions we noted yesterday, Safaricom confirmed that outbound transfers from M-PESA Business Tills will also see charges drop by up to 50%. The broader package targeting small businesses still includes temporarily raising the fee-free collection limit for Pochi la Biashara to KSh 200 for 90 days, set to roll out in August.
Why it matters
These additions confirm the breadth of Safaricom's counter-offensive against the PesaLink banking consortium. By making low-value digital transactions cheaper on both the collection and transfer sides, Safaricom is prioritizing ecosystem lock-in over per-transaction revenue in the escalating battle for Kenya's SME payments market.
According to reports on Saturday, fintech giant Flutterwave is in the process of acquiring an unnamed East African bank. The move signals a major strategic pivot from being purely a payment processor to becoming a licensed financial institution. CEO Olugbenga Agboola indicated the goal is not to become a retail bank, but to use the license to offer a broader suite of services like credit and liquidity solutions to its business clients.
Why it matters
This is a significant competitive development. A major rival is moving to vertically integrate, aiming to reduce reliance on banking partners and control more of the value chain. This could allow Flutterwave to offer more seamless and potentially cheaper services to merchants, including lending, creating a more 'sticky' ecosystem. This acquisition strategy, if successful, could become the new playbook for Africa's largest fintechs.
South African Reserve Bank (SARB) Governor Lesetja Kganyago announced on Saturday that the central bank will keep full ownership of PayInc, the country's rebranded automated clearing house, with no plans to include non-bank shareholders. The SARB acquired a 50% stake in the entity, formerly BankservAfrica, last November as part of its strategy to modernize South Africa's payment systems.
Why it matters
This decision solidifies the SARB's direct control over critical national payment infrastructure, framing it as a public utility rather than a commercial enterprise open to private fintech participation at the ownership level. For payment providers like APS, this clarifies the rules of engagement: while you can build services on top of the rails, influencing or owning the core infrastructure is off the table. The focus remains on leveraging the system for cheaper, faster payments, but within a centrally controlled framework.
As financial institutions rapidly adopt the autonomous AI fraud models we've been tracking, a new analysis emphasizes that 'explainability' is becoming essential for compliance. Tools like SHAP are now crucial for allowing human investigators to understand the signals driving an AI's verdict, preventing the systems from operating as unscrutinized 'black boxes' and helping identify new fraud typologies.
Why it matters
This highlights a critical evolution in deploying AI for risk management. It's no longer enough for a model to be accurate; it must also be auditable. For a small B2B payments team, this means that when selecting or building fraud tools, prioritizing systems with strong explainability features is paramount. It's the key to maintaining control, satisfying regulatory scrutiny, and empowering your fraud analysts to work with AI, not just be replaced by it.
Following up on its recent expansion, Quidax has confirmed its stablecoin payment infrastructure is now live in over 21 countries and supports 14 currencies. The company is marketing the service to startups and enterprises as a way to facilitate international settlements in under 48 hours, aiming to bypass the high fees and delays of traditional correspondent banking.
Why it matters
Quidax is among a growing cohort of fintechs building B2B cross-border settlement solutions on stablecoin rails. Their expanding network puts pressure on traditional payment providers to offer similarly fast and cost-effective services. For African merchants, the increasing viability of stablecoin settlement for operational treasury functions—not just speculation—presents a tangible alternative for managing forex and international payouts.
Following up on the CBN's market structure overhaul we tracked last month, the Central Bank of Nigeria has pushed the compliance deadline for geo-fencing all Point-of-Sale (PoS) terminals to August 1, 2026, citing technical issues. Concurrently, PoS agents are actively protesting looming October 2025 exclusivity mandates that force them to work with a single financial institution—a direct reversal of the bans on agent exclusivity we previously noted.
Why it matters
The delay in geo-fencing provides a technical reprieve, but the dual pressures signal the CBN's unwavering focus on closing traceability gaps in the PoS network. For payment processors, navigating the agent protests against the new exclusivity rules will require immediate operational adjustments to onboarding and monitoring in Africa's largest market.
As networks continue to tighten the chargeback monitoring thresholds we've been tracking, a new analysis details why high-risk merchants increasingly rely on specialist acquirers. The piece contrasts the pooled, aggregator model of many mainstream processors with the dedicated Merchant ID (MID) architecture of specialists, which provides more stability against enforcement programs like Visa's VAMP but demands more rigorous human underwriting.
Why it matters
This is a crucial operational breakdown for any payment provider. It clarifies the structural reasons why merchants, particularly in cross-border e-commerce, can be suddenly terminated. Understanding the mechanics of VAMP, dispute alert systems (Ethoca, Verifi), and the difference between pooled and dedicated MIDs is essential for managing your own acquiring risk and properly advising your merchants on how to maintain processing stability.
A Bank of Italy study published Friday finds that stablecoin-based remittances are not consistently cheaper or faster than services like Wise. Analyzing 200 USDC transfers across 10 corridors, the study concluded that while blockchain fees are low, the primary costs and delays stem from fiat on-ramps, off-ramps, and local banking charges. Total costs ranged from 0.3% to nearly 9%, with speed heavily dependent on the efficiency of domestic instant payment systems.
Why it matters
This is a crucial piece of data that tempers the 'stablecoins-fix-everything' narrative. It validates that the real challenge in cross-border payments isn't just the settlement layer, but the 'last mile' of fiat conversion. For a payment gateway, this reinforces the need to build highly efficient and low-cost on/off-ramp infrastructure to make the promise of stablecoin settlement a reality for merchants needing local currency. The tech alone is not a panacea.
Zimbabwe is moving to regulate cryptocurrencies, a significant policy shift for a country that has previously been resistant. The new regulatory push is driven by the widespread grassroots adoption of digital assets for remittances, cross-border payments, and as a hedge against inflation and currency instability. The government aims to formalize the sector to provide oversight and encourage fintech investment.
Why it matters
Zimbabwe's regulatory pivot is another data point in a broader African trend of moving from crypto prohibition to structured oversight. A formal framework in Zimbabwe would create a more predictable environment for merchant adoption of crypto payments and stablecoin settlements. This move, alongside similar developments in Tanzania and Kenya, is gradually building a clearer, albeit fragmented, regulatory map for digital asset payments across the continent.
Safaricom has launched 'Lipa na Data,' a new service that allows eligible customers with specific data plans (minimum 5GB) to pay for goods and services using their internet data bundles instead of M-Pesa. The conversion rate is set at KSh 0.06 per MB.
Why it matters
This is a fascinating innovation in alternative payment methods, essentially turning a telco asset (data bundles) into a medium of exchange. While likely a niche product for now, it's a creative way to extract value and provide another payment option. For a payment gateway, it’s a reminder of how dynamic the definition of 'payment method' can be in mobile-first markets and highlights the importance of having a flexible platform that can integrate novel rails as they emerge.
The Central Bank of Nigeria (CBN) significantly scaled back its liquidity absorption in July, removing N7.18 trillion from the financial system via Open Market Operations (OMO). This is a 48.6% decrease from the N13.96 trillion mopped up in June. The CBN's playbook appears to have shifted towards fewer, but larger, individual auctions.
Why it matters
The CBN's OMO auctions are a primary lever for managing system liquidity and influencing interest rates and FX stability. This sharp reduction in mopped-up liquidity could signal a change in the bank's stance on interest rates or its approach to managing the naira. For any business with treasury operations in Nigeria, tracking these shifts is critical as they directly impact the cost of capital and the broader macroeconomic environment for merchants.
With the Angolan kwanza now officially live on the SADC Real-Time Gross Settlement (SADC-RTGS) system, the South African Reserve Bank announced that the Botswana pula is slated to be the next currency added. The ongoing expansion of local currency settlement aims to boost regional trade by reducing the need for hard currency conversions.
Why it matters
With Botswana lined up next, the effort to de-dollarize intra-African trade and reduce cross-border friction within the SADC bloc is gaining momentum. For a payment gateway, the continued expansion opens up more efficient settlement corridors and reduces the FX risk associated with routing payments through external currencies.
Regulators Formalize Crypto Oversight, Moving from Caution to Control Several African nations are advancing their regulatory frameworks for digital assets. Zimbabwe is introducing new rules to bring crypto into the mainstream, while Tanzania's central bank has developed a formal concept framework. This follows Kenya's recent moves to define stablecoins as payment-only instruments, collectively indicating a continental shift toward structured oversight rather than outright bans.
Kenya's Payment Fee War Escalates as Safaricom Targets SMEs Safaricom is aggressively cutting fees for its M-PESA merchant services, including Pochi la Biashara and Lipa na M-PESA. By making low-value transactions cheaper or free, Safaricom is directly challenging the recent fee reductions by Kenya's PesaLink banking consortium, intensifying the competition for SME and micro-merchant payment volumes.
South Africa Cements Central Bank Control Over Core Payment Infrastructure The South African Reserve Bank has declared it will retain full ownership of PayInc, the country's rebranded automated clearing house, with no plans to allow non-bank shareholders. This decision underscores the SARB's strategy to maintain tight control over critical payment infrastructure as it modernizes the national payment system.
The 'Last Mile' Problem Tempers Stablecoin Enthusiasm New research from the Bank of Italy provides a crucial reality check on stablecoin remittances, finding they are not consistently cheaper or faster than traditional fintech services like Wise. The study highlights that fiat on-ramp and off-ramp costs, not the blockchain layer, remain the primary bottleneck, reinforcing that efficient local infrastructure is the key to unlocking the benefits of crypto payment rails.
AI in Payments Focuses on Explainability and Practical Risk Reduction The conversation around AI in payments is maturing, moving from pure performance to practical application and risk management. As models become more autonomous, the need for explainable AI (XAI) in fraud detection is becoming critical for compliance and trust. Simultaneously, banks are making direct strategic investments in AI risk platforms, showing a focus on tangible security outcomes over theoretical capabilities.
What to Expect
2026-08-07—Safaricom's reduced Lipa na M-Pesa Buy Goods and Business Till transfer fees take effect in Kenya.
2026-08-11—Public consultation closes for South Africa's proposed ZAR 500 Electronic Travel Authorisation fee.
2026-08-20—Fintech Festival Tanzania begins in Dar es Salaam, focusing on digital payments, AI, and regulatory frameworks.
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