COMESA to develop a regional digital common payment scheme for small businesses

In a bid to address the challenges facing small and medium enterprises (SMEs) in Africa, particularly concerning cross-border digital payments, the COMESA Business Council is spearheading efforts to establish a regional digital common payment scheme. This initiative aims to improve the competitiveness of SMEs by providing them with a platform for seamless cross-border transactions. According to Sandra Uwera, CEO of COMESA Business Council, SMEs account for 80% of the African economy, but their ability to compete is hindered by the lack of efficient digital payment systems. Through consultations with stakeholders across the region, COMESA is laying the groundwork for a regional digital integrated retail payment scheme that caters specifically to the needs of SMEs. The ultimate goal is to enhance SMEs' access to markets, facilitate trade, and integrate them into regional supply chains. The journey towards establishing this common payment scheme has seen COMESA engage with nine countries in the region, working with various stakeholders such as mobile network operators, commercial banks, microfinance institutions, and manufacturers. The organization has identified eight key policy areas that need harmonization at a regional level to facilitate the smooth operation of the payment scheme. By standardizing approaches and creating a collaborative framework, COMESA aims to streamline cross-border transactions for SMEs within the COMESA region. This initiative not only seeks to reduce transaction costs and processing times but also to encourage SMEs to embrace digital financial services and expand their market reach. One of the primary challenges faced by SMEs in the current payment landscape is the high cost associated with cross-border transactions. Existing payment systems tend to focus on bulk transactions, making it difficult and expensive for SMEs to engage in cross-border trade. The conversion rates, foreign exchange fees, and lengthy transaction processing times further deter SMEs from utilizing these systems. The proposed common payment scheme aims to address these challenges by offering real-time transactions at minimal costs, equivalent to domestic transaction fees. By leveraging the widespread adoption of mobile money in sub-Saharan Africa, the initiative seeks to provide SMEs with access to a range of financial services, including digital lending and insurance. Sandra Uwera emphasized that the digital ecosystem in sub-Saharan Africa has seen significant uptake in mobile money transactions, with over 50% of the population utilizing mobile money accounts. Sub-Saharan Africa leads the global market with approximately 850 million registered mobile money accounts across 90 countries. With the collaboration between mobile network operators and banks, there is immense potential to extend financial services to underserved segments, particularly women traders. The regulatory platform being developed will not only safeguard consumers but also create a conducive environment for SMEs to thrive and access essential financial resources. As COMESA continues to drive the agenda for a regional digital common payment scheme, the focus remains on empowering SMEs, enhancing their competitiveness, and fostering economic growth across the continent. By modernizing cross-border payment systems and promoting financial inclusion, COMESA aims to unlock new opportunities for SMEs and drive regional trade and development.