From the traditional tea houses in the ancient Casbah to the lemonade stands at the Roman ruins of Tipaza and the trendy boutiques in downtown Algiers, cash is still the preferred method of payment in and around the capital of Africa’s third-largest economy. Unlike some regions in East or West Africa, mobile money transfers are not common here, and only a few businesses accept card payments.
“Ask any Algerian,” said Ali Nassir, a driver for the French ride-hailing app Heetch, which doesn’t offer card payments. “Cash is the best option here.”
Some Algerians, including Nassir, attribute this reliance on cash to the gap between the official exchange rate of the dinar against the dollar and the black market rate. However, across Africa, even in countries promoting cashless policies, cash transactions at the point of sale remain highly popular.
This is partly due to a lack of trust between buyers and sellers. “In rural areas, many people are hesitant to pay online before receiving their orders,” explained Tania Chorey, co-founder of Shoe Empire, a boutique in Nairobi, Kenya. “If you ship items without upfront payment, sometimes customers turn off their phones to avoid paying.”
At the fourth Intra-African Trade Fair held this month in Algiers, policy experts and merchants discussed how to simplify real-time cross-border trade in cash-driven economies without relying on third-party intermediaries.
For years, policymakers have grappled with this issue. For example, a customer from Burkina Faso wanting to buy dresses from a designer in neighboring Ghana must either find a way to send cash across the border or use an American or European payment gateway.
At the trade fair, which former Nigerian President Olusegun Obasanjo described as “the engine that accelerates trade expansion and investment flows,” this challenge was evident at a vendor’s stall. A Nigerian attendee, unable to pay cash for carrot oils from Polokwane, South Africa, had to use a U.S.-based online remittance service that charged 10% of the transaction in fees.
“I never had issues in South Africa because I always have a card machine,” said Amelia Modjadji, who runs Ami Skin, an oils business. “But for large transactions, I prefer cash.”
Enter the Pan-African Payment and Settlement System (Papss), which promises instant transfers between African countries in local currencies within seven seconds. Launched in 2022 as a tool to boost trade integration, Papss operates under the African Continental Free Trade Area and is supported by the African Export-Import Bank and the African Union. It introduced a retail payment card last June.
Mike Ogbalu III, CEO of Papss, stated that the system significantly cuts processing fees and time compared to overseas payment methods while promoting “financial sovereignty.”
“Payments are essential for exchanging goods and services,” he told the trade fair. “But they can also be a means of control. We’ve seen instances where payment systems were shut down overnight due to conflicts. We aim to protect Africa from such vulnerabilities.”
So far, Papss has partnered with dozens of banks in 18 countries, including Zambia and the often-overlooked Comoros, and plans to expand across the continent in the coming months.
“We want to use this platform to encourage small and medium businesses across Africa that their market should be the entire 1.4 billion people on the continent, with Papss handling the settlement of those transactions,” Ogbalu said.
However, this may take time as Papss faces challenges like limited digital infrastructure, especially in rural areas, currency volatility, and differing foreign-exchange controls. Some experts also point to competition with established payment systems.To gain widespread acceptance, Papss must offer a service that is both affordable and reliable, given the competition from established global payment networks.
Lucie Ekeleba Blay, a lawyer in Accra and former adviser to the West African Monetary Agency, supports the initiative but points out a potential challenge. Papss was developed by the African Export-Import Bank, a supranational financial institution, rather than by African central banks. This could create issues, as she explains: “Many central banks are already working on their own interoperability and payment projects. This raises questions about ownership and alignment—will they view Papss as a helpful addition or as competition that might reduce their profits and influence? Without careful coordination, this conflict could slow down adoption or limit the system’s effectiveness.”
If successful, this high-speed system could eventually make cross-border money transfers in Africa as simple as sending a text message. This would be transformative for small businesses across the continent and simplify life for individuals like Chorey, who is eager to use it.
“Outside Kenya, people rely on services like Moneygram or Western Union, which require visiting their offices to withdraw funds,” she says. “But with Papss, payments will come directly to your phone. That makes it much easier.”
Frequently Asked Questions
Of course Here is a list of helpful FAQs about the potential for a new payment system to revolutionize commerce in Africa
BeginnerLevel Questions
1 Why is cash still so popular in Africa
Cash is familiar tangible and doesnt require a bank account smartphone or reliable internet For many especially in rural areas its the only payment method they have ever known
2 What is a new payment system in this context
It refers to digital ways to pay without physical cash This includes mobile money banktobank transfers via apps QR code payments and digital wallets on your phone
3 What are the main benefits of switching from cash to digital payments
Safety You dont have to carry large amounts of cash reducing the risk of theft
Convenience You can pay bills send money to family or shop from anywhere
Financial Inclusion It gives people without a formal bank account a way to save and manage money digitally
Tracking Its easier to track your spending and manage a budget
4 Are there any successful examples of this in Africa already
Yes Kenyas MPesa is the most famous example It revolutionized how people send money pay for goods and even access small loans all from a basic mobile phone
5 Whats the biggest challenge for a new payment system
The biggest challenge is building trust People need to feel that their money is safe the system is reliable and they wont be scammed Other challenges include poor internet connectivity and low digital literacy in some regions
Advanced Practical Questions
6 How could a new payment system help small businesses
It can help them
Grow Sales Accept payments from customers who dont have cash
Access Credit Their digital transaction history can serve as a credit record to get loans
Simplify Operations Easier tracking of sales and inventory and no need to handle and secure physical cash
7 What about people who arent techsavvy or dont have a smartphone
A successful system must be inclusive Many mobile money services work on simple feature phones using USSD codes which are just menus you navigate with your keypad
