What MANSA’s $10M Raise Means for African SMEs Navigating Cross-Border Payments
In today’s hyper-connected economy, African SMEs and startups face a paradox: the world is more globalised than ever, yet sending and receiving money across borders remains a complex and costly ordeal. With cross-border transactions often marred by liquidity gaps, high fees, and painfully slow settlement times, it’s no wonder that African businesses operating internationally are constantly seeking better solutions.
Enter MANSA’s recent $10 million funding round, led by Tether. While the headlines focus on MANSA’s achievements, the real story lies in what this means for African SMEs and why they should care.
The Cross-Border Payment Challenge for African SMEs
Cross-border payments have long been a pain point for African businesses. According to the World Bank, remittance costs to Sub-Saharan Africa are among the highest globally, averaging around 6.5% per transaction. For SMEs operating on thin margins, these fees can significantly eat into profits. Delayed settlements—sometimes taking days or even weeks—only exacerbate cash flow problems, stifling growth and limiting expansion opportunities.
Moreover, liquidity shortages often plague payment providers, leading to failed or delayed transactions. African startups and SMEs reliant on swift payments to manage inventory, pay suppliers or fulfil customer orders, find such hiccups disastrous.
Why MANSA’s $10M Raise Matters
While MANSA isn’t the only player trying to solve cross-border payment inefficiencies, its recent funding round highlights a growing market focus on liquidity solutions tailored for emerging markets.
- Stablecoin-Powered Liquidity: MANSA’s use of stablecoins for liquidity can potentially bypass traditional banking bottlenecks, offering faster and cheaper settlements. This is particularly relevant in African markets where access to reliable banking infrastructure can be limited.
- Cost Efficiency: By reducing dependency on multiple intermediaries and leveraging blockchain, solutions like MANSA’s aim to cut transaction costs—a win for SMEs looking to preserve their bottom lines.
- Real-Time Settlements: Liquidity solutions that facilitate real-time settlements can ease the cash flow burdens SMEs face, allowing them to reinvest in operations more quickly.
Regional Innovations in Cross-Border Payments
The recent $10 million funding secured by MANSA, led by Tether, underscores a significant movement in addressing liquidity challenges in cross-border payments—a critical issue for African SMEs and startups. However, MANSA is not alone in this endeavour; several other key players across the continent are contributing to this transformative landscape.
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East Africa: Beyond M-PESA
While M-PESA, launched by Safaricom in Kenya, has been a trailblazer in mobile money services, facilitating cross-border transactions and promoting regional trade, other significant initiatives are also making strides:
- Stanbic Bank’s Borderless Banking: Introduced in 2021, this platform allows clients to access their accounts and transact in real-time across Uganda, Tanzania, Kenya, and South Sudan. By March 2022, the solution-processed transactions worth USD 3.5 million, highlighting the demand for secure, real-time cross-border banking services.
- PayRetailers’ Expansion: Originally focused on Latin America, PayRetailers expanded into eight African countries, including Kenya, in 2024. By integrating local payment methods like M-PESA, they offer scalable solutions for businesses aiming to grow their regional presence.
West Africa: Nigeria’s Fintech Surge
Nigeria’s fintech ecosystem is rapidly evolving, with companies like Flutterwave and Moniepoint at the forefront:
- Flutterwave: Established in 2016, Flutterwave provides a payment infrastructure that connects African businesses to the global economy. Its platform supports cross-border transactions, offering SMEs the tools to expand their reach beyond local markets.
- Moniepoint: Launched in 2015, Moniepoint has evolved from providing infrastructure for banks to offering comprehensive digital payment solutions. In October 2024, the company raised $110 million in funding, with participation from investors like Google, to enhance digital payments and banking solutions across Africa.
The Bigger Picture: A Fintech Shift Toward Emerging Markets
MANSA’s expansion plans into Africa, Latin America, and Southeast Asia signal a larger industry trend: fintechs are increasingly prioritizing solutions for emerging markets where traditional banking infrastructure falls short.
This shift isn’t just about making cross-border payments more efficient—it’s about democratizing access to global markets. African SMEs that once found it difficult to scale internationally due to financial barriers may now have more viable pathways to global expansion.
Challenges Remain
However, it’s not all smooth sailing. Regulatory hurdles around cryptocurrencies and stablecoins in many African countries remain a significant challenge. Questions about the long-term stability and security of blockchain-based payment solutions also linger.
Moreover, while fintech solutions like MANSA’s are promising, widespread adoption will depend on how easily SMEs can integrate these tools into their existing workflows without incurring steep learning curves or additional costs.
Implications for African SMEs and Startups
The collective efforts of these fintech innovators are reshaping the financial landscape for African SMEs by:
- Reducing Transaction Costs: By leveraging technology and local currencies, these platforms minimize reliance on traditional banking systems, leading to lower fees for cross-border transactions.
- Enhancing Speed and Efficiency: Digital payment solutions offer real-time processing, reducing delays associated with conventional methods and enabling businesses to operate more efficiently.
- Promoting Financial Inclusion: By providing accessible financial services, these platforms empower underserved communities, allowing more entrepreneurs to participate in regional and global markets.
Why SMEs Should Pay Attention
For African SMEs and startups, understanding the evolving landscape of cross-border payments isn’t just about staying informed—it’s about staying competitive. As more fintechs introduce innovative liquidity solutions, businesses that adapt early could enjoy cost savings, faster transactions, and smoother international operations.
Whether MANSA`s $10M raise will become a game-changer or just another player in the crowded fintech space remains to be seen. But this latest round signals growing momentum in solving cross-border payment challenges that have long plagued African businesses.
For SMEs striving to grow beyond their borders, that’s a trend worth watching closely.
Have thoughts on the future of cross-border payments for African SMEs? Share your views in the comments or reach out to us at [email protected].