Strengthening cross-border payments through financial system integration
There is a growing call for coordinated reforms in cross-border digital payments to drive inclusive growth, strengthen financial stability, and deepen global financial integration across developing economies. For the Central
There is a growing call for coordinated reforms in cross-border digital payments to drive inclusive growth, strengthen financial stability, and deepen global financial integration across developing economies. For the Central Bank of Nigeria (CBN), efficient payment systems are central to economic inclusion. Yet, building a system that works and attracts broader participation requires addressing persistent challenges such as high remittance costs, settlement delays, fragmented payment infrastructures and heavy compliance burdens, reports Assistant Editor COLLINS NWEZE
The future of e-payments in developing economies will depend largely on how reforms and integration within the financial services sector are managed. For Nigeria and other emerging markets, progress hinges on policies that attract investment, support innovation, and provide adequate buffers for financial institutions to handle cross-border payments seamlessly.
Such a balanced approach, experts argue, requires countries to strengthen their economies and draw investments that ultimately improve the digital payment experience for citizens. This context explains why the Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, has pushed for intensified reforms in digital cross-border payments as a pathway to growth and financial system stability.
Speaking at the G-24 Technical Group Meetings held in Abuja, Cardoso stressed that efficient payment systems are central to economic inclusion. He noted that persistent challenges—high remittance costs, settlement delays, fragmented payment systems, and heavy compliance burdens—continue to limit the participation of households and Micro, Small and Medium Enterprises (MSMEs) in global trade.
According to him, these constraints undermine access to modern economic activity, particularly for smaller businesses and low-income households. Financial sector reforms, he said, are therefore designed to tackle these gaps and create a more efficient and inclusive payment ecosystem that benefits all stakeholders. Cardoso revealed that global remittance corridors still attract average transaction costs above six per cent, with settlement delays stretching into several days—barriers that effectively exclude millions from the formal digital economy.
However, he cautioned that while digital payments present vast opportunities, they also pose significant risks, including currency substitution, weakened monetary policy transmission, heightened foreign exchange volatility, capital-flow pressures, and regulatory fragmentation.
On Nigeria’s reform agenda, Cardoso explained that the CBN has strengthened its Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) framework in line with Financial Action Task Force standards. “We have strengthened our AML/CFT frameworks in line with FATF guidelines, including strict dual screening of cross-border transactions to mitigate financial and security risks,” he said.
To deepen regional integration, he added that the apex bank introduced simplified Know-Your-Customer and AML requirements for low-value cross-border transactions. This move is aimed at expanding participation in the Pan-African Payment and Settlement System (PAPSS), easing processes for Nigerian SMEs and enabling faster intra-African trade payments.
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“We have also embraced fintech innovation through our Regulatory Sandbox, allowing payment-focused fintechs to test secure, instant cross-border solutions under close CBN supervision. Nigeria’s commitment to working with G-24 members, the IMF, the World Bank Group, and other partners to build a more inclusive, resilient, and development-oriented global financial architecture,” he said. The G-24 Technical Group Meetings 2026, themed “Mobilising finance for sustainable, inclusive, and job-rich transformation,” brought together global financial stakeholders to advance the modernisation of finance in support of emerging and developing economies.
Nigeria’s milestones in strengthening AML/CFT
Recall that the Financial Action Task Force (FATF) recently removed Nigeria from its grey list of countries with money laundering and terrorist financing risks. Commenting on the announcement, Cardoso, said: “The FATF’s decision to remove Nigeria from the grey list is a strong affirmation of our reform trajectory and the growing integrity of our financial system it reflects a clear policy direction and the coordinated efforts of key national institutions working together to deliver sustainable, standards-based reforms. Our priority now is to consolidate these gains, ensuring that compliance, innovation and trust continue to advance hand in hand to reinforce financial stability and strengthen Nigeria’s global credibility.”
The FATF leads global action to tackle money laundering, terrorism and proliferation financing. The 40-member body, which has the backings of the World Bank Group and International Monetary Fund (IMF), sets international standards to ensure national authorities can effectively go after illicit funds linked to drugs trafficking, the illicit arms trade, cyber fraud and other serious crimes.
For Nigeria, exiting FATF grey list opened her potential in the global financial markets. The FATF leads global action to tackle money laundering, terrorist and proliferation financing. The 40-member body, which has the backings of the World Bank Group and International Monetary Fund (IMF), sets international standards to ensure national authorities can effectively go after illicit funds linked to drugs trafficking, the illicit arms trade, cyber fraud and other serious crimes. The Paris-based watchdog’s decision represents a huge progress for Nigeria financial system as it works to restore investor confidence, reduce the cost of capital and strengthen financial system credibility.
Other countries removed from the list include, South Africa, Mozambique and Burkina Faso. “As of February 2025, the FATF has reviewed 139 countries and jurisdictions and publicly identified 114 of them. Of these, 86 have since made the necessary reforms to address their AML/CFT weaknesses and have been removed from the process,” the report said.
FATF identifies countries or jurisdictions with serious strategic deficiencies to counter money laundering, terrorism financing, and the financing of weapons proliferation. “For all countries identified as high-risk, the FATF calls on all members and urges all jurisdictions to apply enhanced due diligence, and in the most serious cases, countries are called upon to apply counter-measures to protect the international financial system from the ongoing money laundering, terrorist financing, and proliferation financing risks emanating from the country,” it said.
By closing gaps in regulatory oversight and enhancing enforcement against illicit financial flows, the four nations have now met the FATF’s requirements for delisting, boosting their standing among global financial institutions and capital markets. Nigeria and South Africa were added to the list in February 2023 while Mozambique was included in October 2022 and Burkina Faso initially in February 2021.
President, Association of Bureaux De Change Operators of Nigeria (ABCON), Dr. Aminu Gwadabe, said: “The recently announcement of the Financial Action Task Force on the Exist of Nigeria from its Grey list known as Dirty money list shows Nigeria commitment in achieving the 40 FATF recommendations. The move has tremendously induced confidence, and removed tension in the financial market.”
Payment‑system modernisation and digital finance
Cardoso explained that Nigeria’s digital‑finance transformation accelerated in 2025, reflecting the CBN’s twin priorities of fostering innovation while safeguarding stability across the payments ecosystem. Earlier last year, the CBN extended our Payment System Vision roadmap to 2028, an ambitious commitment to modernise payments infrastructure and strengthen cybersecurity. “More than 12 million contactless payment cards are now in circulation. Our regulatory sandbox has expanded to over 40 fintech innovators, enabling safe experimentation and responsible scaling of new digital‑finance solutions,” he said.
Revised agent‑banking guidelines have tightened anti‑money‑laundering controls, including geo‑fencing of high‑risk areas, while improving consumer protection at the last mile. Integration across switching companies has improved, bringing Nigeria closer to seamless domestic interoperability. Supported by these measures, Nigeria today stands among Africa’s most advanced digital payments markets, with a dynamic fintech ecosystem that has produced eight of the continent’s nine unicorns. By mid-2025, leading fintech apps had surpassed 10 million downloads each, with one surpassing 50 million downloads, reflecting deep consumer adoption.
“As digital assets, tokenisation and stablecoins become critical topics for central banks worldwide, our stance remains clear: we will lead thoughtfully, with discipline and clarity of purpose. Innovation must proceed responsibly, anchored in consumer protection and financial stability,” Cardoso said.
The CBN says it will continue to steer monetary policy with discipline, anchored firmly to its core mandate of price stability. “Stability remains the bedrock upon which investment flourishes, resources are allocated efficiently, and purchasing power is protected. In 2026, we will deepen engagement with stakeholders, strengthen collaboration with other regulators and international partners, and foster responsible innovation across the financial system.
“We will continue to provide forward guidance, protect the integrity of our financial markets, leverage technology and AI to improve decision‑making, and build institutional capacity to support an evolving and resilient financial system. By remaining disciplined, forward‑looking and true to our mandate, we will ensure that Nigeria’s economy remains stable, inclusive and primed for sustainable growth.”
E-payment gains for economies
Cardoso said he witnessed first-hand the transformative power of digital finance to broaden economic participation, create meaningful employment, and improve the lives of millions of Nigerians. It is for this reason that the CBN is intent on seizing our nation’s unique opportunity to harness fintech innovation for national development. “Nigeria is undergoing a rapid and significant financial evolution. Over the past decade, our nation’s fintech landscape has grown from a handful of startups into one of Africa’s most vibrant innovation ecosystems. Even amid global economic headwinds, Nigerian fintech firms continued to attract investment and drive change,” he said.
He explained that with improved stability of Nigeria’s currency and domestic economy, it is clearer than ever that financial innovation can advance inclusion at scale. “This report reflects the Central Bank’s commitment to fostering a thriving fintech landscape while safeguarding the stability of our financial system. It is the product of extensive engagement between regulators and industry stakeholders. By surveying fintech operators, financial institutions and policymakers, we have gathered candid insights on what is working, what is not, and where we can do better.
“The findings illuminate both our progress and the gaps we must address, from modernising regulatory frameworks and payments infrastructure to supporting startups in reaching Nigeria’s unbanked communities. The report is careful to contextualise Nigeria’s fintech journey within global trends, reminding us that we are part of a rapidly evolving digital finance landscape that offers immense opportunities as well as new risks,” he stated.
Continuing, he said that for the CBN, innovation is a strategic imperative. “We are committed to creating an environment where new ideas can flourish under prudent oversight, and where inclusion is at the heart of our endeavours. Fintech must help deliver financial services to the last mile of our population, from the bustling cities to the rural villages, so that no Nigerian is left behind in the digital economy.
According to the CBN, financial technology, or fintech, refers to the use of innovative digital technologies to deliver financial services. It encompasses a broad range of market segments, from digital payments and remittances to lending platforms, crowdfunding, insurance technology (InsurTech), investment and wealth management technology (WealthTech), and regulatory technology (RegTech). It explained that as digital platforms transform how people send money, access credit, and interact with financial institutions, Nigeria finds itself both a leader and a testing ground.
Nigeria hosts some of Africa’s most influential fintech firms and continues to attract significant investment. In 2024, Nigerian startups raised over US$520 million in equity funding out of a continental total of US$2.2 billion, ranking among the continent’s leading ecosystems by both capital raised and deal activity. And this trend is not new: five years earlier, in 2019, Nigerian tech startups raised approximately US$747 million, about 37 per cent of all African startup funding that year.
