Africa’s Trillion-Dollar Payment Systems Point to Major Investment Opportunities

The African digital payments ecosystem is at an inflection point. A new analysis from the State of Inclusive Instant Payment Systems (SIIPS) in Africa 2025 report reveals that Instant Payment Systems (IPS) now move $1.98 trillion annually. This massive flow of capital highlights a transition from siloed payment networks to foundational Digital Public Infrastructure (DPI), opening up three major avenues for growth and investment across the continent.

The report, produced by the AfricaNenda Foundation, the World Bank Group, and the United Nations Economic Commission for Africa (UNECA), frames Inclusive Instant Payment Systems (IIPS) as the essential engine of a new, integrated digital economy.

1. The Trillion-Dollar Opportunity in Digital Public Infrastructure (DPI)

The full value of Africa’s digital transformation lies in integrating three core digital layers: digital identity, digital payments, and data exchange. While 36 African countries now have live IPS and issue digital IDs, only a handful have fully integrated these components. This gap is the continent’s next frontier for investment.

The Potential Windfall of Integration: A holistic DPI system can unlock substantial economic benefits by creating a more efficient, user-centric digital economy.

• Expanded Credit Access: By integrating secure ID, instant payments, and data exchange, new digital credit scoring models can emerge, leading to an expansion of credit access for micro, small, and medium enterprises (MSMEs) and individuals who were previously excluded from formal financial services.
  
• Government Efficiency and Tax Revenue: DPI enables efficient public service delivery and increases tax revenue by formalizing transactions and creating transparent data trails.
  
• Targeted Infrastructure Investment: To build the DPI foundations, there is a clear opportunity to address infrastructure and human capital shortfalls. This includes:
  
  • Rural Connectivity: Government-backed rural connectivity drives (like those in Ghana and Nigeria) to extend affordable internet coverage to underserved populations are critical for ensuring IPS adoption reaches the "last mile".
    
  • Talent Development: Programs, such as Kenya's Ajira Digital and Rwanda's Digital Ambassadors, are training citizens and specialists in digital literacy and essential technical skills required to build and maintain the DPI stack.
    

2. Modernizing Government Payments: The $31 Billion Catalyst

Roughly 70 perent of social safety net funds in Africa are still disbursed in cash, representing about $31 billion per year in government-to-person (G2P) transfers. These funds are "ripe for modernization" through IPS, but currently, only 11 of 36 live IPS in Africa support the G2P use case.

High-Impact Opportunities:

• Immediate Financial Inclusion: Digitizing G2P payments provides recipients with real-time access to funds and the ability to choose their preferred Payment Service Provider (PSP). This is a potent financial inclusion tool, as beneficiaries are then more likely to use these accounts for additional financial services like savings and credit.
  
• Bypassing Bottlenecks: IPS operators can implement "plug-and-play integration paths" for government agencies (like NIBSS in Nigeria or the e-Finance gateway in Egypt). This secure, direct conduit eliminates the need for agencies to rely on a single commercial bank intermediary (a sponsor-bank bottleneck), making disbursements faster, more secure, and cost-effective.
  

3. Scaling Cross-Border Trade with Interlinked Systems

Interlinking national IPS has the potential to "revolutionize cross-border transactions" for remittances, global trade, and investment. Traditional methods are expensive, slow, and reliant on foreign hard currency. Interlinked IPS, in contrast, offer real-time, low-fee experiences.

Key Growth Areas for Intra-African Trade:

• Regulatory Harmonization: The biggest technical hurdle is the fragmentation of national regulations (e.g., varying KYC/AML rules). The African Union Commission (AUC) and AfricaNenda Foundation are collaborating on a proposed Payment Services Directive for Africa (PSDA) , aiming to harmonize policies and create a single, integrated digital payments market, similar to Europe's Single Euro Payments Area (SEPA).
  
• Technological Alignment: Operators can move to overcome disparate messaging standards by adopting ISO 20022 and API integration layers. Furthermore, exploring Central Bank Digital Currencies (CBDCs), which can simplify cross-border settlements by bypassing pre-funded accounts, holds long-term potential.
  
• Cost Advantage: By interlinking, IPS can charge less than traditional Money Transfer Operators (MTOs) and remove intermediaries, thereby eliminating reliance on foreign currency (like the USD) and its associated costs and complexities.
  

Summary of System-Level Innovations

Beyond the macro opportunities, the report highlights practical, system-level innovations that can accelerate adoption and improve trust:

The advancements, particularly Nigeria's NIP becoming Africa's first IPS to reach 'Mature' inclusivity status, demonstrate that these ambitious digital goals are achievable. Success hinges on continued collaboration between central banks, private sector innovators, and development partners to execute on the integrated DPI vision.