The island nation sets out to eliminate high fees and multi-day delays for African cross-border transactions.
This article appears in the October issue of Global Finance Magazine.
In a fragmented landscape, aggregation matters. This philosophy underpins Mauritius’s quest to become the epicenter of cross-border payments in Africa, where layers of friction and an inability to converge have impeded deeper economic integration.
By building frictionless systems anchored in regulation, technology, and market dynamics, Mauritius, a small, upper-middle-income island nation of just 1.26 million people, is redefining payments in Africa and shifting the narrative for a continent long bound to Western capital in international payments.
“Through trust, Mauritius has become a hub for digital finance,” said Shane Mungur, senior associate at Mauritius-based law firm BLC Robert & Associates.
The reality of cross-border payments in Africa is that businesses and entrepreneurs must route transactions through correspondent banks in Europe and the U.S., paying fees as high as 7.1%, compared with a global average of about 2.8%. Worse, transactions can take as long as seven days to complete.
Mauritius’s effort to demonstrate that seamless payments in Africa are feasible is part of the nation’s ambitious transition to what it terms a “future-ready economic” model. This includes shifting the economy from dependence on sugarcane production and textiles and apparel to a new framework with the financial sector as the heartbeat. It has also meant shifting the focus of its search for a competitive edge from regional and bilateral trade treaties, legal and regulatory reforms, tax incentives, and the speedy incorporation of companies to cutting-edge innovation.
“Mauritius remains relevant and attractive as payment ecosystems evolve,” said Sharmilla Bhima, a partner at Mauritius-based law firm Appleby. Expanding its international financial center’s scope to cover cross-border payments is based on a conviction that Africa’s economy can only transform and become truly resilient if money can move 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.
“Mauritius is a jurisdiction that serves as a gateway for businesses seeking to participate in Africa’s growing economic integration,” Bhima said.
Cross-Border Payments Boom
The timing appears to be right.
Africa’s cross-border payments market is ballooning. Valued at $329 billion last year, it is projected to hit the $1 trillion mark in the next decade. Fragmentation nevertheless remains a barrier to unleashing the benefits of cross-border payments, cutting against the growth of trade, investment, entrepreneurship, financial inclusion, and economic integration.
Plans for a common currency to replace more than 40 local currencies remain a pipe dream while multiple regulatory regimes, limited interoperability, weak transparency, and dependence on intermediary currencies make friction a constant.
The continent continues to depend on hard currencies that are in short supply, increase conversion costs, and tie up working capital. Yet, the success of the African Continental Free Trade Area, the continent’s most ambitious effort at market integration, stands or falls largely on the ability of the member states to settle transactions in local currencies. The same applies to e-commerce, which is impeded by strict domestic transfer restrictions and high fees. Only 55% of African governments permit electronic know-your-customer and remittance costs are the highest globally, averaging 8% to 8.5%.
As Africa tries to tackle cross-border payments, some 36 instant payment systems, 33 country systems, and three regional systems are live, enabling some instant payments but also adding complexity. The Pan-African Payment and Settlement System remains the boldest initiative to counter these impediments. So far, 31 countries, 190 commercial banks and fintechs, and 16 payment switches are connected.
Sticking to the Basics
BLC Robert & Associates
Mauritius aims to provide its own answer by sticking to the basics of finance. Its regulatory focus is on creating a predictable environment that attracts investment and encourages transparent and secure capital flows: not just a safe haven or conduit for laundering.
Predictability has made Mauritius a hotspot for foreign direct investment. Last year, FDI inflows reached a record $1 billion, up from $705.7 million in 2024. Most of this — $400 million — was in the financial services sector, compared to just $20.8 million in 2024.
The Bank of Mauritius has assembled what it considers to be robust hardware and software infrastructure that can integrate 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. The former settles transactions in major currencies as well as the local rupee.
“This is one of the most effective competitive edges in payments,” Mungur said.
Mauritius is also exploiting its strategic location as a financial bridge between Africa and Asia. A partnership with China enables settlement of transactions with renminbi while linking MauCAS with India’s switch has significantly boosted digital payments.
While regulation and technology are fundamental to Mauritius’s positioning as a payments hub, so is its ability to adapt to changing market dynamics. By removing exchange controls, the rupee is fully convertible, while foreign currency accounts can be held locally and no approval is needed to repatriate profit or capital. This is critical for treasurers moving money across African borders.
The central bank is also cognizant of the payments landscape’s fluidity, from electronic transfers to mobile wallets, QR-based payments, blockchain, tokenization, and many other channels, and has made encouraging financial innovation a priority.
“Encouraging innovation has enabled Mauritius to adopt new technologies that improve speed, reduce costs, and enhance client experience,” said Bhima. Regulators have nevertheless been careful to safeguard financial integrity and prevent inherent risks associated with like money laundering, terrorist financing, fraud, cybercrime, and sanctions evasion.
On this, Mauritius understands that trust is essential to establishing itself as a hub for cross-border payments.
(Source: State of Inclusive Instant Payment Systems in Africa 2025)
John Njiraini is a contributing writer based in Kenya.