19 Nov African Online Payments: CBDCs and Stablecoins and their impact on eCommerce Payments

Online payments for eCommerce across the African continent could get interesting based on a recent announcement by BRICS countries Kirill Dmitriev, CEO of the Russian Direct Investment Fund (RDIF).

Apparently the BRICS nations South Africa, Russia, Brazil, India and China have been in discussions to introduce a crypto currency for payments and settlements between countries as an alternative rail to the usual Swift payment network.

There are a few motivations for this, one of which is to become less dependent on the dollar and to speed up and make settlements between countries simpler.  Some of the countries are at an advanced stage in linking to each other's crossborder settlement systems.

Fiat collateralized stablecoins make absolute sense for eCommerce payments and cross border online payments, particularly in Africa where there is a lack of liquidity and excessive governmental control over movement of funds.  It is particularly challenging for eCommerce companies to sell and get paid online for goods and services across Africa and repatriate those funds economically and effectively to their home country.  Using for example a dollar denominated stablecoin makes sense.  

Governments are waking up to the fact that a central bank digital currency (CBDC) could make sense for them in terms of managing money supply more effectively.  It could also mean that consumers could be well served without the cost of intermediaries. African countries Tunisia and Senegal have implemented CBDCs for payments and South Africa has been experimenting with it.

CBDCs, Stablecoins and cryptocurrency cooperation amongst BRICS countries would certainly smoothen the rails of eCommerce and online payments across the African continent.  Having said that, the jury is out with regard to the intrusiveness of, and controlling possibilities associated with, centralised digitisation of money, particularly in despotic countries across Africa.  We will be watching developments with interest to ensure that we as an African payments provider, and our customers, are up to date and remain relevant and most effective in terms of eCommerce payments for our multinational companies expanding across the continent.  

Please contact us now if you are an eCommerce company expanding across Africa and looking for card acquiring and/or mobile money payments like M-Pesa, Tigo Pesa, MTN Mobile Money in key eCommerce territories like Kenya, Nigeria and South Africa.