Mauritius Eases Cross Border Payments in Africa
As part of its push to boost African economic ties, Mauritius targets high fees and lengthy waits in cross-border transactions—key obstacles to regional integration. The country seeks to position itself as Africa’s central hub for such payments, where systemic inefficiencies have historically stifled broader financial collaboration.
By building systems anchored in regulation, technology, and market factors, Mauritius is redefining payments in Africa. Shane Mungur, senior associate at Mauritius-based law firm BLC Robert & Associates, said, “Through trust, Mauritius has become a hub for digital finance.”
Cross-Border Payment Challenges
The situation for cross-border transactions in Africa requires businesses and entrepreneurs to channel payments through correspondent banks in Europe and the U.S., facing fees as high as 7.1%, compared to the global average of roughly 2.8%. These transactions can also take up to seven days to finalize.
Mauritius’s initiative to showcase the feasibility of seamless payments in Africa forms part of the country’s broader strategy to transition into what it calls a ‘future-ready economic’ model. This involves moving away from reliance on sugarcane agriculture and textiles and apparel towards a framework where the financial sector plays a central role.
Sharmilla Bhima, a partner at the Mauritius-based legal firm Appleby, remarked, ‘Mauritius remains relevant and attractive as payment ecosystems evolve.’ Expanding the international financial center’s mandate to include cross-border payments is grounded in the belief that Africa’s economy can only grow and become truly resilient if money moves across borders efficiently, securely, transparently, and affordably.
In recent years, more than $80 billion in Africa-bound investments have been structured through Mauritius. More than 450 private equity funds are now domiciled there, deploying capital across the continent. Bhima said, “Mauritius is a jurisdiction that serves as a gateway for businesses seeking to participate in Africa’s growing economic integration.”
Africa’s cross-border payments market is expanding rapidly, valued at $329 billion last year, and projected to reach $1 trillion within the next decade. Nevertheless, fragmentation persists as an obstacle to unlocking the potential of cross-border transactions, hindering trade, investment, entrepreneurship, financial inclusion, and economic integration.
Mauritius’s Solution
Mauritius seeks to address this by focusing on fundamental financial principles. Its regulatory strategy centers on creating a predictable environment that draws investment and encourages transparent and secure capital flows. The Bank of Mauritius has developed what it considers robust hardware and software infrastructure capable of integrating with existing systems across multiple jurisdictions.
The Mauritius Automated Clearing and Settlement System and the Mauritius Central Automated Switch (MauCAS), both administered by the central bank, were designed with interoperability in mind. Mungur said, “This is one of the most effective competitive edges in payments.”
Mauritius is also capitalizing on its strategic position as a financial link between Africa and Asia. A partnership with China enables settlement of transactions in renminbi, while connecting MauCAS with India’s payment system has significantly boosted digital payments. The central bank is also conscious of the payments environment’s fluidity, encompassing electronic transfers, mobile wallets, QR-based payments, blockchain, tokenization, and other channels, and has prioritized supporting financial innovation.
Regulators have made encouraging financial innovation a priority, while safeguarding financial integrity and preventing inherent risks associated with money laundering, terrorist financing, fraud, cybercrime, and sanctions evasion. Bhima said, “Encouraging innovation has enabled Mauritius to adopt new technologies that improve speed, reduce costs, and enhance client experience.”
Mauritius understands that trust is essential to becoming a cross-border payments hub. Its ability to adapt to evolving market conditions, combined with a predictable regulatory framework, has made it a hotspot for foreign direct investment. Foreign direct investment inflows hit a record $1 billion last year, rising from $705.7 million in 2024.
Most of this investment, $400 million, was in the financial services sector, compared to just $20.8 million in 2024. The Bank of Mauritius’s efforts to create a robust and interoperable payments system have been critical to attracting this investment, and the nation’s future as a hub for cross-border payments in Africa looks promising, with the Mauritius Automated Clearing and Settlement System settling transactions in major currencies as well as the local rupee.
Regional Interoperability Efforts
Pan-African Payment and Settlement System stands out as the most ambitious attempt to simplify that maze, linking thirty-one member states, one-hundred-ninety commercial banks and fintech firms, and sixteen payment switches.
Currency Integration Hurdles and Transaction Cost Barriers
Plans for a single African currency to replace more than 40 local currencies remain unrealized. Multiple regulatory regimes, limited system interoperability, and weak transparency create constant friction. Dependence on intermediary currencies further hampers seamless payments. These obstacles prevent efficient regional trade.
The continent still relies on hard currencies that are scarce, raise conversion costs, and tie up working capital. The African Continental Free Trade Area’s success hinges on member states’ ability to settle in local currencies, while e-commerce faces strict domestic transfer limits and raised fees. Only 55% of African governments permit electronic know-your-customer checks, and remittance costs average 8% to 8.5%, the highest globally.
Regulatory Flexibility and Market Access
Removing exchange controls has rendered the Mauritian rupee fully convertible, allowing foreign-currency accounts to operate locally without special licences.
Businesses can now repatriate profits and capital without prior approval, a feature treasurers cite as essential for cross-border cash management.
A bilateral agreement with China enables settlements in renminbi, expanding currency options for African traders engaging with Asian markets.
