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As the African economy continues to expand, African businesses are expanding their business operations across their local borders and tapping into new markets. And, with this expansion comes the need to send and make payments for goods and services across borders. This process of moving money across borders is not without friction, as the payment landscape in Africa is still riddled with challenges that African businesses have to deal with as they try to scale their businesses and make cross-border payments.
In this blog, we’ll delve into the challenges African businesses face when moving money and making payments across borders and how they can overcome them.
Challenges Faced by African Businesses When Making Cross-Border Payments
1. High Costs:
One of the most significant barriers to cross-border payments for African businesses is the exorbitant costs associated with making transactions. Traditional financial institutions often impose hefty fees and unfavorable exchange rates, causing a decrease in profit for businesses making these cross-border transactions. These high costs discourage many African businesses from exploring new markets and expanding their reach.
2. Banking Bottlenecks:
When making cross-border transactions, African businesses frequently encounter hurdles within the banking system. Lengthy clearance processes, multiple intermediaries, and cumbersome paperwork can lead to unnecessary delays and complications in the transaction process. This affects the speed of payments and increases the cost of payments.
3. Over-reliance on USD:
While converting local currencies to USD is a common practice in the African market, it comes with inherent risks, exposing African businesses to unpredictable fluctuations in currency exchange rates. Many African currencies are volatile, making businesses vulnerable to exchange rate fluctuations when converting to USD. Consequently, this affects their business profit and overall success in the global marketplace.
4. Lack of Transparency:
Transparency is a critical aspect of any successful business operation, and cross-border payments are no exception. Unfortunately, African businesses often lack visibility into the status of their payments and deal with hidden fees when making these cross-border transactions. This not only makes cross-border transactions difficult and unpredictable but also affects the growth and expansion of businesses.
AZA Finance: Africa’s leading cross-border payments provider
AZA Finance is Africa’s leading cross-border payments provider, with over ten years of experience in the industry. We specialize in facilitating transparent, efficient, and secure transactions across 115+ markets through our robust API and intuitive web platform.
AZA Finance’s solutions empower African businesses with:
1. Competitive rates and access to deep liquidity:
We offer competitive rates, transparent pricing, and access to deep liquidity via our robust API and intuitive web platform. By eliminating the excessive fees associated with traditional financial institutions and providing competitive exchange rates, AZA Finance helps African businesses save on transaction costs, enabling them to reinvest their resources for growth.
2. Efficient financial Infrastructure:
With over a decade of experience, AZA Finance is committed to helping African businesses thrive. With our API and web platform, cross-border payment processes are simplified, eliminating banking bottlenecks, reducing delays, and ensuring that transactions are completed swiftly and accurately.
3. Diversified Currency Options:
AZA Finance provides access to over 25+ currencies, reducing reliance on USD and mitigating the risks associated with currency fluctuations. Our financial infrastructure makes transacting, exchanging, paying, and settling in all major African and G20 currencies easy for your business.
4. Enhanced Transparency:
Our platform offers real-time tracking and reporting, giving businesses complete visibility of payment transactions.
As a standard, your business gets centralised reporting via API, Portal, or SFTP. You can also access premium reporting with our advanced custom reporting feature. This enables your business to have proper visibility of its payment operations within our platforms.
In conclusion, at AZA Finance, our goal is to help businesses in Africa or businesses looking to expand to Africa thrive with our cross-border payments solution. We offer African businesses the tools they need to expand their operations, tap into new markets, and contribute to the economic growth and development of the continent.