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On paper, getting paid from Africa should be simple—send an invoice, get paid. But if you’ve done business on the continent, you know it’s rarely that straightforward. In reality, businesses often encounter unexpected obstacles that chip away at their revenue, disrupt their operations, and create unnecessary friction in cash flow.
One of our clients—a wholesale supplier based in Europe who frequently exports goods to buyers in Nigeria and Ghana— learned this the hard way. When she first expanded into these markets, she assumed international payments would be as seamless as in her home country. But soon, she found herself battling unexpected deductions on every transaction, long settlement delays, and unpredictable currency fluctuations. In one instance, a delayed payment cost her a lucrative deal because she couldn’t restock inventory in time.
She’s not alone. Many global businesses eager to tap into Africa’s fast-growing economies find themselves battling hidden costs that eat into their margins.
So, what exactly are these hidden costs, and how can you avoid them? Let’s break it down.
Cross-border payments often come with multiple layers of fees that significantly reduce the final amount received. These costs typically include:
To bring this home more, a $10,000 transaction could quickly shrink to $9,200 after multiple deductions. That’s $800 that could have been invested into your business, gone.
While some of these fees are necessary for the services provided, you can avoid some unnecessary ones by choosing a provider like Cedar Money, which offers transparent pricing and competitive rates with no hidden fees, ensuring you retain more of your earnings.
When making FX collections, currency conversion is a silent profit killer especially when dealing with countries in Africa with currencies that have lower value. Many exporters and other businesses unknowingly lose money due to:
For instance, if a business in Europe receives payments in Nigerian Naira (NGN) instead of USD, currency fluctuations could lead to significant losses. The Naira has historically been volatile, with devaluations happening multiple times over the past decade. Without a reliable FX strategy, businesses risk losing a significant portion of their expected revenue.
How to Avoid It:
Opt for a payment provider like Cedar Money, which offers competitive FX rates and allows you choose what currency to receive payments in, even when your client sends funds in their own local currency. This way, you avoid exposure to unstable local currencies and everyone walks away happy.
One of the most frustrating challenges businesses face is slow payment processing times. This can be caused by:
How to Avoid it:
With Cedar Collections, you benefit from T+1 settlements, ensuring your payments (which can be up to $30,000,000 per day) clear within one business day, rather than weeks.
Many African businesses operate in markets where international payment methods like credit cards are not widely used. If your payment collection system doesn’t support local bank transfers, mobile money, or regional payment rails, you may lose customers to competitors who offer more accessible options.
How to Avoid It:
Cedar Money supports collections from Nigeria, Ghana, Kenya, South Africa, Tanzania, Rwanda, Uganda, Zimbabwe, and Ivory Coast, allowing buyers to pay in their local currency while you receive funds in your preferred currency.
Every country has its own cross-border payment regulations, and failing to comply can lead to payment rejections, frozen accounts, or even legal issues. Common regulatory challenges include:
If you’re looking to do business in multiple African countries, it can be even more daunting trying to adhere to these regulatory requirements which may differ per country.
How to Avoid It:
With Cedar Money, compliance is automated and built-in, so you don’t have to navigate complex regulatory landscapes.
Countries in Africa offer immense business opportunities, but outdated banking infrastructure, excessive costs, and unpredictable regulations can slow you down. The good news? There’s a better way.
With Cedar Money, you can:
Stop losing money to hidden fees and delays. Switch to Cedar Money today and get paid faster, for less. Get started now!
Please note: Cedar does not hold or transmit any funds and does not hold MSB or money remittance licenses.
