Despite the shared cultural and socioeconomic similarities among various African countries, their proximity, and coexistence, the continent is starkly divided by a fragmented payment infrastructure. This division has made it exceedingly difficult for small business owners and everyday individuals to smoothly exchange value and receive payments across the continent. For instance, a small business owner in the bustling city of Lagos encounters payment challenges when providing services to customers in the welcoming city of Accra. Similarly, people in the lively cities of Johannesburg face hurdles when trying to send payments to business partners, friends, and family in Kigali or Nairobi, all due to the disjointed payment system. Even when payment solutions are found, the associated fees often discourage repeated transactions.

Africa possesses immense potential for economic growth and development, but it grapples with significant obstacles in enabling trade and financial inclusion. The absence of efficient and cost-effective cross-border payment systems is constantly impeding the flow of goods, services, and capital throughout the continent. Each country operates with its distinct payment system and currency, leaving little room for integration with the broader African community. This situation gives the impression that African countries and their citizens are isolated in economic islands, stifling potential growth opportunities.

According to a McKinsey report, only 5 to 7 percent of all payment transactions in Africa are conducted electronically or digitally, in stark contrast to more than 50 percent in Turkey. This means that a significant portion of cross-border payments still relies on cash or informal channels, which are costly, slow, risky, and often inaccessible to many segments of the population.

However, the situation is rapidly evolving as Africa embraces innovation and technology to reshape its payment landscape. The same report notes that in 2020, Africa's e-payments industry generated approximately $24 billion in revenue, with around $15 billion stemming from domestic electronic payments. The domestic e-payments market is projected to grow by approximately 20 percent annually, reaching about $40 billion by 2025.

With this understanding, Yellow Card introduced a new product at the end of 2022, Yellow Pay, offering a seamless and secure means to send and receive money across African borders instantly using cryptocurrencies. Initially available in a few countries, by January it had gained traction and is currently accessible in 16 African countries, including Nigeria, Botswana, Zambia, South Africa, Cameroon, and Kenya.

This product eliminates the complexities of currency conversion and hidden fees when making payments to loved ones in other African nations. With a few clicks, customers can smoothly convert their local currency into crypto and send it to recipients in a different country, who will instantly receive it converted into their local currency.

"This is more than just a money transfer service - it's a powerful tool that will unlock new opportunities for people across Africa," said Chris Maurice, CEO and co-founder of Yellow Card. "By enabling instant, low-cost transactions across borders, we are helping to create a more connected and dynamic Africa."

Yellow Pay leverages Yellow Card's crypto exchange platform to complete customer transactions using USDT on the blockchain. As mentioned in the McKinsey report, cryptocurrencies, stablecoins, and central bank digital currencies (CBDCs) are expected to have a significant impact on the outlook for e-payments in Africa, given their promising use cases and Africa's historical propensity to embrace innovation on a large scale and leapfrog into the future.

Peter Mureu, the Director of Marketing at Yellow Card, highlighted the product's unique value proposition, emphasizing its affordability and speed as game-changers. The product holds the promise of bridging the payment divide within Africa, enabling Emeka to easily connect with Kwame for service exchange and Mhambi to establish stronger business partnerships with Nadia through this seamless payment solution.

The significance and relevance of cross-border payments in Africa cannot be overstated. These payments facilitate international trade, stimulating economic growth, job creation, poverty reduction, and regional integration. They also play a pivotal role in promoting financial inclusion, enabling individuals and businesses to access financial services, save money, invest in opportunities, and enhance their livelihoods.

As Africa continues to innovate and adopt new technologies to enhance its payment systems, it is poised to become a global leader in e-payments and a model for other regions to emulate. The future of payments in Africa shines brightly with promise.