This is an excerpt from The Future of Fintech in Africa 2023 report.

African fintech has been white-hot for a minute.

As early as 2011, before the major liquidity events of 2020, 2021 and 2022, Helios had already paid $92 million for a majority stake in Interswitch. Down in South Africa, Fundamo sold to Visa for $110 million in cash. In Nigeria in 2016, Interswitch splashed $50 million to buy VANSO, a fintech company that provided financial technology to banks.

The need for ultra-fast, instant, accessible payments has been evident for a long time on the continent.

Technology is overestimated in the short run but highly underestimated in the long run. Nothing proves this more than the current state of the fintech ecosystem in Africa.

The success of these early players inspires subsequent innovations and a flourishing digital finance ecosystem across the continent. These trailblazers paved the way for subsequent innovators like Kora, who recognised the boundless potential of connecting Africa through seamless payments.

Yet, over 20 years after Interswitch, Vanso, and Fundamo blazed the trail in digital payments, 15 years after Nick Hughes, Susie Lonie and Safaricom created M-Pesa in Kenya, cross-border payments across Africa remain firmly out of reach.

A big obstacle to seamless payments across Africa is the need for interoperability among payment systems.

Platforms like e-transact cannot interact with M-Pesa, M-Pesa cannot connect with Vodafone Cash in Ghana, and Vodafone Cash remains disconnected from Celltel in Francophone regions. The cost of fragmented payments in Africa are higher transaction costs, limited access and financial inclusion, slowed economic growth and general inefficiencies, whose costs we have yet to be aware of.

The value of an interconnected Africa from a payments perspective is immeasurable. Consider a transaction between Nigeria and Ghana, where the money currently flows from Nigeria to the US, then to the UK, and finally to Ghana. It would be faster to drive between the two countries physically.

Imagine a scenario where Nigeria and Ghana are seamlessly connected, akin to two states within one country, enabling frictionless payments between them. This is the Africa that Kora envisions, and with products like USD card acquiring and multi-wallet payments in the pipeline, we are already making strong strides towards this future.

What will it take to achieve an Africa with no payment borders?

So much work has been done already.

The launch of the Pan-African Payment and Settlement System (PAPSS) is bringing us close to seamless cross-border payments. PAPSS aims to rival traditional swift networks, functioning as an automated clearing house for pan-African payments and as a crucial cross-border payment switch facilitating transactions across the continent.

The rise of fintech companies across the continent presents an immense opportunity to transform cross-border payments and foster healthy competition to connect Africa under one unified API. Kora is at the forefront of building a pan-African payment infrastructure that enables businesses to enter Africa and connect with all 54 countries while supporting local enterprises in accessing global markets. While acknowledging the contributions of trailblazing companies like Interswitch, Cellulant, and e-tranzact, much work remains to be done.

Regulators, innovators and legacy financial institutions still appear to work with different playbooks. There must be collaboration among various stakeholders along the value chain. Regulators must lead the way by establishing favourable regulations, reducing the red tape and bringing down unfriendly payment borders.

Banks, microfinance institutions, and fintech companies must also play our parts. The holy matrimony between core banking infrastructure, fintech innovators, and regulators is critical in delivering a seamless payment experience.

If we get the collaboration right, we can build robust systems that encourage interoperability and innovation in payment solutions, along with cooperation between banks, payment providers, regulators, and governments.

Implementing these measures will establish a robust African payment ecosystem that facilitates cross-border transactions, driving economic growth and prosperity across the continent.

Kora is creating a future without digital financial barriers in Africa. Our commitment extends beyond Nigeria, as we serve markets throughout the continent, providing local and pan-African coverage. We are building a robust intra-continental connection and bridging Africa with the rest of the world. We are lucky to be at this critical place at this crucial moment in African tech.