The Standard Bank Group, Africa’s largest lender by assets, operates in 20 sub-Saharan African countries, four global financial centres, and two offshore hubs, totalling 26 countries of operation.
With such a large global footprint, it makes sense that the group has taken a long hard look at the cross border payments landscape, particularly in the sub-Saharan region. Yesterday the group released its White Paper – Payments in Africa, an outline of the current payment landscape.
Cross border payments provides a sizeable chunk of revenue and profits for the group, and while this is not specifically outlined in their financial results, there are indicators of the contribution it makes to the group profit.
Specific profit derived directly from cross-border payments is not broken out in the group’s financial statements or results, however, related activities fall under broader segments like Corporate & Investment Banking (CIB) and fee-based revenues.
For context:
- Transaction Banking within CIB, which encompasses payments services including cross-border transfers, contributed R7.7 billion in headline earnings (up 3% year-over-year), with non-interest revenue of R6.0 billion (up 8%). This segment facilitated significant cross-border activity, including R150 billion in inter-Africa trade flows.
- Foreign currency service fees, a key revenue line tied to international and cross-border transactions, totalled R2.9 billion (down 15% from R3.4 billion in 2023 due to lower volumes and devaluations), forming part of the group’s R35.6 billion in net fee and commission revenue.
- Operations in Africa Regions (outside South Africa), where cross-border payments are prominent for trade and remittances, generated R18.0 billion in headline earnings (41% of the group total, down 1% in rand terms but up 22% in constant currency).
These figures provide the closest proxies, as the bank does not isolate profit solely from cross-border payments in its public disclosures.
Payments Hold Major Growth Potential:
With potential for GDP growth in Africa looking positive over the short to medium term, and with global trade shifts providing the catalyst for greater inter-African trade growth, payments provide a fertile landscape for banks and fintech’s that is underpinned by ever growing number of new product offerings in the payment arena.
The Sub-Saharan 2025 GDP growth is projected at 4.0% to 4.2%, according to the International Monetary Fund (IMF) and World Bank. This uptick is driven by stabilizing commodity prices, easing inflation (projected to slow to 5.6% in emerging economies), and improved trade conditions.
In 2026 GDP growth is expected to strengthen to around 4.3%, as per the World Bank’s April 2025 update. This reflects continued recovery in non-resource-rich economies like Senegal (8.4%), Rwanda (7.1%), and Côte d’Ivoire (6.2%), supported by infrastructure and energy sector investments.
Projections for 2027 suggest growth will stabilize at 4.3% (World Bank) or slightly higher, potentially reaching 4.5%.
Current African Trade Focussed Outside of Africa
A key data point to consider is that currently Intra-African trade currently only forms a mere 18% of the total export trade from Africa. This alone presents a massive opportunity that is supported by the Africa free-trade agreement AfCTFA, that currently has 55 nations as signatures, with a combined GDP of $3.4 trillion.
The major disruptions in world trade cycles, precipitated by shifting geopolitical alignments and trade tariff wars, create an unusual opportunity that African nations should be looking to harness – building up inter African trade.
Key Changes Across Africa That Should Assist Trade Growth
Investment in infrastructure is also accelerating with major investments in not just infrastructure but building infrastructure that will strengthen current trade corridors.
This includes:
- Abidjan – Lagos Corridor in West Africa linking Nigeria and Cote d Ivoire
- Walvis Bay corridor Connecting Namibia, Zambia, Angola and DRC
- Northern Corridor – linking Mombasa – Uganda Rwanda, Burundi and South Sudan
- Lobito Corridor – That provides a link from Angola to DRC and Zambia along the Benguela Railway connected to the Lobito Port that has attracted major US investment in rail & port upgrades
Regional Payment Opportunity
There are currently eight official regional communities in Africa that includes SADAC, East African Community, ECOWAS,
Standard bank provided a view that there is much scope for improvements in providing channels for regional payments across these communities that could be settled in local currencies with the aim to remove payment inefficiencies that currently exist.
Existing Challenges:
- Harmonization of policy is a major challenge
- Currency Liquidity Issues
- 40+ currencies in Africa
- Infrastructure issues creating transport issues
- Access to financial services (50% of Sub Saharan Africa’s population are still unbanked)
The Standard bank study took a look at both public and private systems with some interesting statistics.
Currently there are 28 payment systems across Africa with an additional 31 under development.
The goal for effective payment systems in Africa should provide secure, instant, cost effective & cashless payment structures.
The study also points out that for this to become a possibility there needs to be inoperability between traditional banking, mobile banking and alternative banking and payment systems.
The evolution of payments and cross border payments in Africa.
Standard bank says that it views the future of payments in Africa as complete eco-systems – partnerships that focus on a customer focused value propositions and that leverage the data linked to each client to understanding the clients needs.
Their vision is for a platform economy where payment solutions that can operate across sectors and regions – a single platform with multiple participants
Blockchain Payments – Not yet Decided
Despite the latest available data from Chainalysis (covering July 2023 to June 2024), Sub-Saharan Africa indicating that approximately $125 billion in on-chain cryptocurrency value was received for the period, Standard Bank says that while they are watching this space they are waiting for further regulatory developments before they consider stablecoins as a payment solution.
Stablecoins, which are particularly used for these purposes, and account for about 43% of the volume ($53.75 billion), offering lower costs (around 60% cheaper than traditional methods for a $200 transfer) and faster processing.
Welcome Development
The belief in adopting a platform approach, that includes alternative payment options and solutions to solve Africa’s payment constraints by Africa’s largest banking, is a welcome development that could see a much wider partnership develop between banks, fintech’s and regional authorities that can start to provide much needed cost-effective and immediate payment offerings but that can also start to work towards greater policy alignment between regions and nations to provide further catalysts for inter-African trade to scale.
Perhaps the new departure will also spark further initiatives to settle policy around crypto-currencies that would establish better payment options that will likely provide the best payment efficiencies in terms of time and cost.
