The Future of Fintech in Africa: Cross-Border Payments & Embedded Finance

Kenya, a global leader in mobile money, continues to shape the industry, facilitating digital transactions and boosting business operations.

A recent webinar hosted by The Kenyan Wall Street, in collaboration with Kora, Onafriq, and Conduit, explored the future of fintech in Africa, discussing key opportunities and challenges facing the sector.

Africa’s Fintech Growth Over the Last Five Years

Over the past five years, Africa’s fintech sector has witnessed unprecedented growth, driven by digital IDs, mobile payments, and embedded finance. Countries such as Kenya, Nigeria, Benin, and Ethiopia have adopted digital identification systems, expanding financial services and enhancing access to banking.

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Fintech innovation has moved beyond peer-to-peer transactions, integrating financial tools into non-financial platforms. This shift has led to the specialisation of fintech services, offering tailored solutions that enhance customer experience and market reach.

Regulatory frameworks have also evolved, encouraging innovations like Buy Now, Pay Later (BNPL) models and embedded lending solutions, which increase access to credit.

Embedded Finance: The Catalyst for Seamless Transactions

Embedded finance is redefining global money movement, reducing transaction delays and enhancing security and compliance.

According to Stephen Oluwatobi, COO at Kora, cross-border transactions used to take up to two weeks. He highlighted how fintechs have drastically improved efficiency, replacing slow, outdated systems with instant, reliable, and secure payment solutions.

A report by Kora and Finextra revealed that 90% of African transactions remain cash-based, underscoring the need for embedded finance to bridge this financial gap.

Challenges Facing Fintech in Africa

Also read: Rwanda’s Five-Year FinTech Strategy: Aiming to Lead Africa’s Digital Future

Despite significant progress, fintech firms still face major hurdles, including:

• Know Your Customer (KYC) compliance: Varying standards across multiple African markets complicate verification processes.

• Data privacy and security concerns: Managing vast amounts of customer data while balancing transparency and regulatory compliance remains a challenge.

• Market fragmentation: Inconsistent treasury services across countries increase operational costs.

• Market entry difficulties: Regulatory complexities make it challenging for fintechs to scale across multiple regions.

Advancing Financial Inclusion and Literacy

Education and awareness are crucial to fintech adoption. According to Erick Wainaina, General Manager at Conduit, fintechs must meet consumers where they are by providing accessible financial education through USSD technology, articles, videos, and social media.

By promoting financial literacy alongside digital literacy, fintech firms can protect consumers from fraud, encourage responsible financial management, and drive sustainable growth.

Impact of Embedded Finance on MSMEs and Entrepreneurs

Also read: AI and Fintech: Shaping Africa’s financial inclusion future

For small businesses and entrepreneurs, embedded finance is a game-changer, integrating financial tools directly into e-commerce platforms, business management tools, and accounting software.

This seamless access to payments, credit, insurance, and lending enables MSMEs to:

• Receive payments faster

• Secure capital more easily

• Automate financial workflows

This shift reduces operational burdens and fosters a more dynamic and resilient business ecosystem.

Policies to Unlock Fintech’s Potential

To sustain fintech’s growth, governments are adopting a hybrid regulatory approach, balancing innovation with financial stability.

Key regulatory advancements include:

• Simplified licensing processes to lower entry barriers for startups.

• Deregulation in wealth management to increase access to investment tools.

Also read: Ethiopian fintech wins prestigious award at Global SME Finance Awards

• Stronger collaboration between regulators and fintech firms to promote transparency, trust, and compliance.

For fintechs to thrive, they must remain customer-focused, compliant, and adaptable, aligning with emerging market needs and global trends.

Africa’s Fintech Industry in the Next Decade

Looking ahead, Africa’s fintech sector is set for exponential growth, driven by:

• Increased digital adoption among MSMEs and young consumers.

• Expansion of payment gateways and financial services across industries like construction and manufacturing.

• The rise of Nairobi and Lagos as fintech innovation hubs.

Also read: The rise of fintech in Africa

• A stronger focus on ESG (Environmental, Social, and Governance) principles, ensuring sustainable and low-cost financial solutions.

With continued investment, Africa’s fintech revolution will unlock financial inclusion, economic prosperity, and a digitally connected future.