**A guide to cross-border payments for African businesses**

[\\ Back to Kora Blog](https://www.korahq.com/blog) In Industry Insights # A guide to cross-border payments for African businesses July 20, 2024 July 19, 2024   Moyo Oluwatuyi Brand Storyteller Share Article [](https://www.facebook.com/sharer.php?u=https://www.korahq.com/post/cross-border-payments-for-african-businesses/)[](https://www.linkedin.com/shareArticle?url=https://www.korahq.com/post/cross-border-payments-for-african-businesses&title=A%20guide%20to%20cross-border%20payments%20for%20African%20businesses)[](https://twitter.com/share?text=A%20guide%20to%20cross-border%20payments%20for%20African%20businesses&url=https://www.korahq.com/post/cross-border-payments-for-african-businesses/) # Table of contents - [What are cross-border payments?](https://www.korahq.com/blog/cross-border-payments-for-african-businesses#toc-what-are-cross-border-payments?) - [Methods you can use to accept cross-border payments](https://www.korahq.com/blog/cross-border-payments-for-african-businesses#toc-methods-you-can-use-to-accept-cross-border-payments) - [The parties in a cross-border transaction](https://www.korahq.com/blog/cross-border-payments-for-african-businesses#toc-the-parties-in-a-cross-border-transaction) - [How African businesses can start accepting cross-border payments](https://www.korahq.com/blog/cross-border-payments-for-african-businesses#toc-how-african-businesses-can-start-accepting-cross-border-payments) - [What are the benefits of cross-border payments for your business?](https://www.korahq.com/blog/cross-border-payments-for-african-businesses#toc-what-are-the-benefits-of-cross-border-payments-for-your-business?) - [Types of businesses that can accept cross-border payments](https://www.korahq.com/blog/cross-border-payments-for-african-businesses#toc-types-of-businesses-that-can-accept-cross-border-payments) # Editor's note: ‍ Expanding your business to other countries doesn’t have to be a big risk if you understand how cross-border payments work and how to accept them. ‍ When you figure it out, you build multiple revenue streams and have a competitive advantage. While cross-border payments can be tricky due to currency conversions, regulations, compliance, and fraud, this guide will help you understand them. ‍ We’ll cover the different methods for accepting cross-border payments, the benefits, and how to start. ‍ ## What are cross-border payments? Cross-border or international payments are digital payments between businesses or people in different countries. ‍ While payments between people are more popular, B2B cross-border payments [are bigger and more complex](https://www.fxcintel.com/research/reports/how-big-is-the-b2b-cross-border-payments-market). ‍ That’s because of the number of parties involved, more difficult compliance checks, currency conversion, settlement processes and other factors. ‍ ## Methods you can use to accept cross-border payments ### Wire transfers WIre transfers are one of the most common methods to send money across countries for individuals and businesses. While they’re great for personal transfers and large sums of money, they are not ideal for business payments. ‍ Wire transfers are generally expensive and take longer to process, depending on the country and currency. Transaction fees can be as high as $50 per transaction, and it can take up to three days for the receiver to receive the value. ‍ This can cause reconciliation issues and cash flow problems for a business owner. ‍ ### Debit and credit cards Card payments are very common in Africa, and businesses that want to accept digital payments in Africa should have this option. It’s a dominant online payment option in Nigeria, as [37% of online payments in 2023](https://www.statista.com/statistics/1172940/distribution-of-online-payment-methods-in-nigeria/) were card payments. In 2024, [43% of e-commerce transactions](https://www.statista.com/statistics/509006/preferred-payment-methods-online-shoppers-africa/) in South Africa were completed using a credit card. ‍ ### Mobile money This method is common in certain African countries, such as Kenya and Ghana. In Kenya, there are over [77 million momo accounts](https://www.statista.com/statistics/1188510/registered-mobile-money-accounts-in-kenya) and a population of [56 million](https://www.worldometers.info/world-population/kenya-population/). ‍ Also, [59.7 per cent of the Ghanaian population](https://www.statista.com/statistics/1175988/mobile-money-accounts-ghana/) has a mobile money account. ‍ If you want to accept customer or business payments in these countries, implement this method. ‍ ### Pay with Bank This is one of the fastest methods to accept cross-border payments. ‍ This method enables users authorize a payment using their banking credentials. In most cases, this method is instant. Your customers are able to pay you from their bank accounts without debit or credit cards or manually transferring money on their mobile banking app. It ‍ ### Bank Transfers Bank transfers are a common method of payment in countries like Nigeria. Processing times for bank transfers differ per country, but in Nigeria, they’re instant. ‍ ## The parties in a cross-border transaction Multiple entities need to work together to complete a cross-border payment. ‍ **1\. Issuing/sender’s bank** This is the customer’s bank or financial institution in a transaction. They provide payment methods like debit cards or bank transfers. Most call them issuing banks for card transactions, but they’re sometimes referred to as the sender’s bank for bank transfers. ‍ **2\. Payment processors** Payment gateways act as the communication bridge between the business and the customer. Payment processors authorise the movement of funds during the process. Kora, Paypal and Stripe are payment processors. ‍ **3\. Acquiring/receivers bank** This is the merchant’s bank. Like the issuing/sender’s bank, it holds the merchant’s account and receives the payment during a cross-border transaction. ‍ **4\. Mobile money operator** In some African countries like Kenya and Ghana, customers sometimes pay through mobile money solutions like MPesa or MTN momo. ‍ The mobile money operator is the customer’s operator. Examples are MPESA and MTN MoMo. ‍ **5\. Card network** The owner of the card brand the customer carries, such as Mastercard, Visa, Verve, American Express, and Afrigo. ‍ ## How African businesses can start accepting cross-border payments ### 1\. Research your target market; currency, tax and regulations ‍ The first step is to learn about the local currency, the preferred payment methods, regulatory landscape and tax requirements. For instance, mobile money is very common in Kenya and Ghana but not in Nigeria. ‍ Regulation and tax requirements can be complex if you want to accept business payments across African countries. ‍ Figure out the requirements per country and follow them before you launch your business in those markets. ‍ > For example, Kenya and Cameroon offer tax breaks for companies that list on their stock exchange compared to Nigeria which relies on indirect domestic taxation, particularly excise duties, due to its economic structure. However, it is vital to note that most of these African countries have double taxation agreemen