Africa

Licensing, Authorisation & Market Access

South Africa and Nigeria are running the two most consequential licensing-architecture stories in the African payments market this cycle, and they point in opposite directions. The South African Reserve Bank has published a third draft Authorisation Framework alongside a draft exemption notice, moving toward an activity-based licensing regime that replaces reliance on bank sponsorship for e-money issuance and money-remittance activity. The practical effect, once finalised, is that non-bank payment service providers would be authorised directly against the activities they perform rather than needing to operate under a sponsoring bank's licence, a structural liberalisation of market access for the non-bank segment even as the framework simultaneously brings that segment inside a formal prudential perimeter for the first time. This runs in parallel with the Cabinet's April 2026 approval of the Conduct of Financial Institutions (COFI) Bill for submission to Parliament, which would establish a single market-conduct framework spanning open finance, crypto assets, and payment-system activity under South Africa's Twin Peaks regulatory architecture, a conduct-side complement to the Reserve Bank's prudential licensing reform. The COFI Bill's inclusion of crypto assets within the same conduct perimeter as traditional payment-system activity is itself notable: it signals that South Africa's regulatory architecture is converging digital-asset conduct oversight with mainstream payments conduct oversight, rather than treating crypto as a separate regulatory silo.

Nigeria's Central Bank moved in the same period, but toward tightening rather than liberalising. The Fourth Edition Foreign Exchange Manual, issued 15 May 2026, revises cash-disbursement rules for personal and business travel allowances and updates eCCI capital-registration documentation requirements, while reaffirming that domestic transactions must be naira-denominated. This is a bank-facing instrument in the first instance, since FX-manual compliance sits primarily with deposit money banks handling FX transactions. Separately, and more consequentially for the non-bank segment, the CBN has imposed a cross-ownership cap: any entity holding more than 25 percent share of the consumer-issuing market is barred from holding more than 15 percent share of the merchant-acquiring market, and vice versa, with compliance deadlines of 31 December 2026 and 1 January 2027. This measure is explicitly aimed at non-bank payment service providers, OPay, Moniepoint, PalmPay, Paystack, and Flutterwave are the named affected entities, and represents a direct market-structure intervention in a segment that has grown large enough, and vertically integrated enough across issuing and acquiring, to attract this kind of competition-style regulatory response. The market-power-cap regime's dual-direction design, capping issuing-side concentration from extending into acquiring, and vice versa, reflects a deliberate attempt to prevent single-group dominance across both sides of the payments value chain, a competition-policy concern that is analytically distinct from, but adjacent to, the safety-and-soundness rationale typically associated with payments licensing. Nigeria's simultaneous FX Manual revision, by contrast, sits squarely within the traditional prudential and macro-stability rationale for licensing intervention.

The bank-versus-non-bank distinction is therefore the analytical spine running through both jurisdictions' licensing developments this cycle, but the direction of travel differs sharply. South Africa's reform lowers the barrier for non-banks to access the market directly rather than through a sponsoring bank, while formalising prudential oversight of that same segment. Nigeria's reform does the opposite in its market-structure dimension: it constrains how large and how vertically integrated a non-bank payment group may become, even as its FX-manual revision continues to route certain categories of FX-handling activity through bank-centric compliance obligations. Any payment group operating across both markets will need to manage two structurally different licensing philosophies: activity-based market access in South Africa, and a market-structure ceiling in Nigeria.

Outlook

The SARB Authorisation Framework's final publication, expected in the third quarter of 2026 following the close of the industry comment period, is the near-term milestone that will determine how quickly South Africa's activity-based regime becomes operative for non-bank applicants. The COFI Bill's parliamentary progress through the second half of 2026 will determine whether the conduct-side framework is in place on a comparable timeline. In Nigeria, the 31 December 2026 and 1 January 2027 compliance deadlines for the cross-ownership cap are the concrete near-term test: whether large, vertically integrated fintech groups restructure their issuing and acquiring businesses ahead of the deadlines, seek exemptions, or contest the requirement will be the clearest signal of how binding this market-structure intervention proves in practice.

Payment Corridor Dynamics

The Pan-African Payment and Settlement System (PAPSS) achieved two concrete integration milestones this cycle that together mark a step change in how African cross-border payment corridors are structured. The Bank of Central African States, the central bank for the six-country CEMAC zone, joined PAPSS on 9 July 2026, extending the network to 28 African countries, more than 190 participating commercial banks and fintechs, and 16 connected national payment switches. BEAC's accession is significant beyond its raw addition to the country count: it brings an entire regional monetary union, CEMAC, into the PAPSS architecture in a single accession event, rather than requiring each member state's national payment system to integrate separately, a materially faster path to regional coverage than country-by-country onboarding.

Separately, PAPSS and Kenya's domestic instant-payment scheme, Pesalink, went live with a direct integration enabling instant, 24/7 local-currency cross-border payments: PAPSS participants across the continent can now settle directly into Kenyan bank accounts and mobile-money wallets, linking more than 80 Pesalink participants to more than 160 PAPSS-connected banks. The structural significance of this integration is that it removes two frictions simultaneously, the need to convert into and out of a reserve currency, typically the US dollar, for cross-border settlement, and the need to route the transaction through a correspondent-banking chain with its associated cost and settlement-time overhead. A payment originating from a PAPSS-connected bank can now settle directly into a Kenyan recipient's account in local currency, in real time, without either leg of the transaction touching a correspondent bank abroad.

For banks that have historically depended on correspondent relationships denominated in US dollars to clear African cross-border payments, PAPSS's local-currency settlement model changes the currency-risk profile of the transaction as much as its routing. A transaction settled directly in Kenyan shillings or CEMAC's CFA franc, without an intermediate dollar conversion, removes one full leg of currency conversion cost and associated exchange-rate exposure from the transaction chain. That is a distinct benefit from the speed and cost benefits of avoiding correspondent-chain routing, and it is likely to be a significant factor in participant banks' calculus for prioritising PAPSS-linked settlement over correspondent-banking alternatives where both are available.

Taken together, the BEAC/CEMAC accession and the Pesalink integration describe a corridor-dynamics trend that is structural rather than episodic: PAPSS is not simply adding participant banks one at a time, it is absorbing entire regional payment infrastructures as integration units. Afreximbank, PAPSS's founding sponsor, has structured the scheme's growth through a mix of individual bank and fintech participant onboarding and, increasingly, direct accession by national and regional payment-system operators and central banks, the BEAC accession being the clearest recent example of the latter pattern. That governance approach, layering institutional accession on top of individual-participant onboarding, is itself part of why PAPSS's participant count and switch count have grown as quickly as they have relative to comparable regional payment-infrastructure projects elsewhere.

Outlook

The near-term question is which national instant-payment scheme integrates with PAPSS next, following the Pesalink precedent in Kenya, and whether further regional monetary unions follow CEMAC's example of joining as a bloc rather than through individual member-state accession. The corridor-dynamics trend is likely to continue expanding market by market and scheme by scheme over the coming reporting cycles, though the pace of any single jurisdiction's integration remains contingent on its own domestic instant-payment infrastructure being ready to connect.

Correspondent Banking, Settlement & Access

Nigeria's Central Bank has imposed a naira-exclusive payout requirement on international money transfer operators, effective 1 May 2026: Western Union, MoneyGram, Remitly, and all other IMTO licensees must now pay Nigerian remittance recipients exclusively in naira, calculated at the official NFEM/Bloomberg BMatch rate, rather than in the originating foreign currency or at a rate set by the IMTO. The directive is explicitly aimed at gaining central-bank visibility over dollar inflows arriving through remittance channels and at reducing the pressure those inflows have placed on the parallel foreign-exchange market when recipients or intermediaries have historically been able to access dollar payouts outside official-rate channels.

This is fundamentally a correspondent-banking and settlement-access measure rather than a simple currency-conversion rule, because it changes where and how the foreign-currency leg of a remittance transaction is settled. Previously, an IMTO's local correspondent or agent network in Nigeria had latitude in how a foreign-currency remittance was disbursed to the end recipient; the naira-exclusive requirement removes that latitude and routes the foreign-currency-to-naira conversion through the official NFEM/Bloomberg BMatch rate at the point of payout, centralising the conversion mechanism rather than leaving it to the disbursing institution's own arrangements. The specific rate mechanism matters analytically: the NFEM and Bloomberg BMatch rates together define the official conversion benchmark IMTOs must now use, replacing whatever combination of official-plus-margin or parallel-market-referenced pricing individual IMTOs may previously have applied at the point of payout. Centralising on a single official benchmark removes IMTO-level pricing discretion at the payout stage entirely, which is a more far-reaching intervention than a simple reporting or visibility requirement would have been.

The bank-versus-non-bank access asymmetry that is this module's analytical spine is visible here in a specific form: banks handling correspondent relationships for cross-border settlement have generally operated within CBN's existing FX-management architecture, reinforced this cycle by the Fourth Edition FX Manual, while non-bank IMTOs had, until this directive, more latitude in how they structured payout currency and rate. The naira-exclusive rule closes that latitude gap, bringing non-bank remittance-payout practice into closer alignment with the currency-control discipline banks already operate under, which is a form of access-and-settlement convergence between the two channels even though it is imposed through a payout-currency rule rather than a licensing change. For the sending-side institutions, Western Union, MoneyGram, Remitly, and other IMTO licensees operating the US-Nigeria and broader diaspora-to-Nigeria corridors, the directive does not change the foreign-currency collection leg of the transaction, only the Nigerian payout leg. The operational burden therefore falls most heavily on each IMTO's Nigerian disbursement infrastructure and its local banking or agent partners, who must now apply the official rate uniformly rather than through whatever local arrangement previously governed payout economics.

The broader access implication is for Nigerian diaspora remittance flows generally: a directive of this kind changes the practical value proposition of formal remittance channels relative to informal ones, since informal channels operating outside the regulatory perimeter face no equivalent naira-exclusive constraint.

Outlook

The practical test over the coming reporting cycles is whether IMTO payout volumes through formal Nigerian channels remain stable under the naira-exclusive regime, or whether the directive pushes a measurable share of remittance flow toward informal channels operating outside its reach, a dynamic that would work against the directive's own stated aim of gaining visibility over dollar inflows. This sits alongside Nigeria's broader FX-management reform cluster this cycle, including the Fourth Edition FX Manual and the cross-ownership caps on payments-market structure, as part of a coordinated effort by the CBN to reassert control over correspondent-banking and settlement access in a market where non-bank actors have grown to dominate significant transaction volume.

Commercial Intelligence & Fintech

Two discrete VASP-licensing events in Nigeria and Ghana are this cycle's commercial-intelligence signal in the African digital-asset space. Nigeria's Securities and Exchange Commission admitted GIGX Technologies and KuCoin Nigeria into its Accelerated Regulatory Incubation Programme (ARIP), granting both firms Approval-in-Principle status pending full VASP registration under the Investments and Securities Act 2025. This is a licensing-status event rather than a capital transaction: no funding amount, valuation, or investment figure is associated with either admission, and none should be inferred, these are regulatory incubation-programme entries, not disclosed commercial transactions. KuCoin Nigeria's ARIP admission places an internationally recognised exchange brand inside Nigeria's formal VASP-registration pathway, while GIGX Technologies' parallel admission adds a domestically-oriented entrant to the same cohort, a mix of international and domestic participants that is itself a relevant commercial-intelligence data point about how Nigeria's ARIP program is populating.

In Ghana, the central bank's VASP registration mandate under Notice BG/GOV/SEC/2025/18 has now registered more than 100 virtual-asset service providers, covering a user base reported at more than three million Ghanaians. As with the Nigerian ARIP admissions, this is a regulatory-registration data point rather than a disclosed commercial or investment event; no aggregate transaction value or individual firm valuation is available from this cycle's sourcing, and none is asserted. Ghana's registration count indicates a digital-asset user base of meaningful commercial scale relative to Ghana's overall population, which is a relevant data point for any firm assessing market-entry economics in the Ghanaian VASP segment, independent of any single firm's registration status.

Separately, Kenya has replaced its Digital Asset Tax with a VASP transaction-fee excise duty, a fiscal-policy change affecting the commercial economics of operating a VASP in the Kenyan market rather than a licensing or product-launch event as such. This change moves the marginal cost structure VASPs and their users face on a per-transaction rather than a per-holding basis, which is the kind of fiscal-structure detail that shapes product design and pricing decisions for VASPs operating in or entering the Kenyan market. Taken together, the Nigeria, Ghana, and Kenya developments this cycle describe continued build-out of the commercial and regulatory infrastructure supporting VASP operation across three of the continent's largest digital-asset markets, even though none of the three individual developments this cycle carries a disclosed transaction value.

The distinction between this commercial-intelligence lens and a structural market-analysis lens matters here: a specific admission into a regulatory incubation programme, or a specific count of registered VASPs, is a discrete, dated commercial-intelligence event of the kind this module tracks, distinct from any broader thematic judgment about how VASP regulation is reshaping product access across the region, which belongs to a different analytical lens entirely. No disclosed transaction values attach to any of these events this cycle, the ARIP admissions, the Ghana VASP registration count, and Kenya's excise-duty reclassification are each regulatory or fiscal-status changes rather than reported deals, and this module records them as such rather than inferring commercial terms that were not disclosed.

Outlook

The near-term commercial-intelligence question is whether GIGX Technologies and KuCoin Nigeria progress from Approval-in-Principle to full VASP registration under ISA 2025, and on what timeline, since ARIP admission is an intermediate rather than terminal regulatory status. In Ghana, whether the registered-VASP count continues to grow past the current 100-plus figure, and whether any of those registrants disclose commercial terms in a future cycle, is the specific development to watch. Kenya's excise-duty replacement of its digital-asset tax is a fiscal event whose commercial effect on VASP transaction volumes and pricing in the Kenyan market is the practical outcome to monitor going forward.