East Africa Moves to Create Payments Market

East Africa is taking steps to transform its national payment systems into an integrated regional market infrastructure. Instead of creating a new system, the plan is to connect existing ones, enabling quicker and smoother money transfers between countries. Rwanda and Tanzania are leading this effort, working on connecting Tanzania’s Instant Payment System (TIPS) with Rwanda’s National Payment Switch (RSwitch) to create a payment corridor under the Cross-Border Payment System Masterplan of the East African Community (EAC).

While this initiative focuses on faster remittances, it also aims to simplify cross-border transactions for businesses, banks, fintech companies, and mobile-money operators. Kenya is also contributing to the regional payments architecture by connecting its instant-payment network, Pesalink, to the Pan-African Payment and Settlement System (PAPSS).

This partnership allows instant payments across borders, settling them in local currencies. These developments show that East Africa may achieve payments integration through connecting existing systems, rather than building a single system. The East African Community’s Regional Masterplan, launched on August 24, includes three technical working groups to support the implementation of the plan.

The Masterplan covers four pillars: governance and regulation, infrastructure, inclusivity, and capacity building. With $156.6 billion in total trade for EAC members in 2025, the financial infrastructure for regional trade will need to improve. Robert Omotunde, MDU Capital's executive director and chief investment officer, believes that East Africa’s interoperable payments could significantly change regional trade economics.

As the African Continental Free Trade Area expands, payment systems that support this commerce could become crucial. However, ensuring reliable connections across different regulatory and monetary environments remains a challenge.