…Closing regulatory gaps in mobile money, crypto, and cross-border payments

By Yetunde Oluwafunbi AJAYI

Africa is undergoing a sweeping transformation in the way people store value, transfer money, access credit, and conduct everyday business. With more than 1.1 billion registered mobile money accounts in Sub-Saharan Africa and approximately 2.1 billion across the continent, financial services are shifting rapidly from traditional bank branches to mobile phones and digital platforms (World Bank 2025).

At the same time, Africans have become some of the most active users of cryptocurrencies and virtual assets, relying on them for remittances, inflation hedging, and access to dollar-based savings (Chainalysis 2023/24). Cross-border fintech companies are expanding just as quickly, linking regional markets and global corridors and creating a highly interconnected digital payments ecosystem (IMF/World Bank 2025).

This digital transformation is reshaping financial inclusion, empowering millions of small businesses, and deepening the region’s integration with global markets. Yet as the speed and scale of innovation accelerate, the regulatory systems designed for slower, bank-centric environments are struggling to keep pace. This gap between innovation and regulation has become one of the most pressing financial-governance challenges facing African policymakers today (UNCTAD 2023).

Fast growth, slow regulation

In just a decade, Africa has become one of the world’s most dynamic laboratories for digital finance. Mobile phones, instant payment rails, digital credit, and crypto platforms have fundamentally changed how money moves (World Bank 2025). However, these developments have outpaced the evolution of anti-money-laundering (AML) and counter-terrorist-financing (CFT) frameworks, which remain largely rooted in traditional banking models (FATF Mutual Evaluation Reports 2023).

This tension is most visible in four rapidly expanding sectors: mobile money, cryptocurrency, cross-border payments, and digital lending. Each illustrates how innovation can outstrip oversight, creating vulnerabilities that criminals and corrupt actors can easily exploit (FATF 2021–23).

1.       Mobile Money – High volume, low oversight

Mobile money is now the backbone of everyday finance in Africa. Platforms such as M-Pesa, MTN MoMo, Airtel Money, OPay and PalmPay process billions of low-value transactions, from market purchases and utility bills to school fees and merchant payments (GSMA 2025). Africa processes the majority of global mobile-money transaction value, making it the epicentre of this industry (GSMA 2025).

Despite this scale, many mobile-money operators are not held to AML standards equivalent to those applied to banks, with supervision often focused first on financial inclusion rather than financial-crime risk (FATF 2022). Regulatory frameworks commonly treat them as simple payment service providers rather than systemically important institutions handling large flows of customer funds, including cross-border transfers (ESAAMLG 2023).

2.      Cryptocurrency adoption – Innovation outrunning regulation

Sub-Saharan Africa has also become one of the fastest-growing regions for cryptocurrency use. Retail users rely on virtual assets for remittances, savings, and protection against FX shortages, with Nigeria, Kenya, South Africa and Ghana leading the trend (Chainalysis 2023/24). Yet most African jurisdictions lack comprehensive licensing and supervisory regimes for virtual asset service providers (VASPs). Many exchanges, OTC brokers and peer-to-peer platforms operate in regulatory grey zones with inconsistent customer-due-diligence requirements and limited reporting obligations (ESAAMLG & GIABA 2023).

A few countries, such as South Africa, Mauritius, Seychelles, Botswana and Rwanda, have taken meaningful steps toward regulating VASPs in line with global standards, but they remain the exception (FATF 2023). For much of the continent, the result is a fragmented landscape where illicit flows can easily be routed through lightly regulated platforms beyond the reach of local enforcement (UNCTAD 2023).

3.      Cross-border payments and remittances – Innovation with exposure

Africa receives nearly US$100 billion annually in remittance inflows, and an increasing share of these funds now flows through fintech channels (World Bank Migration & Development Brief 2025). Digital corridors linking mobile wallets, agent networks, and online platforms have improved speed and reduced costs, creating significant development benefits. (GSMA 2025). However, weak coordination between origin, transit and destination countries leaves gaps that illicit actors can exploit. Inconsistent KYC rules, limited visibility over nested or correspondent relationships, and weak cross-border information-sharing mean that suspicious patterns can go undetected until it is too late (FATF Mutual Evaluation Reports 2023).

4.    Digital lending and BNPL – Credit without clarity

Digital lenders and buy-now-pay-later (BNPL) providers are expanding rapidly, offering instant loans via mobile apps and online platforms, often using alternative data to score borrowers (World Bank 2025). Many operate outside traditional regulatory frameworks or in partially regulated categories, with onboarding standards, fraud controls and AML expectations inconsistent across markets (FATF Mutual Evaluation Reports 2023). Without clear licensing regimes or well-defined supervisory authority, regulators may lack both the mandate and the tools to enforce higher standards.

Together, these four developments demonstrate the scale of Africa’s digital-finance success and the urgency of modernising AML/CFT frameworks to match it. The gaps carry significant economic and reputational risks: weak controls undermine public trust, enable large-scale fraud and expose financial institutions to global scrutiny that can limit correspondent-banking relationships and access to international capital.

Why modernization matters now

A handful of African jurisdictions have taken meaningful steps toward strengthening AML/CFT oversight, especially in the virtual-asset space. South Africa, Mauritius, Seychelles, Botswana and Rwanda have introduced clearer licensing rules, risk-based supervision and more robust reporting requirements (FATF Mutual Evaluation Reports 2023). Their progress demonstrates what is possible with sustained regulatory commitment.

However, most countries continue to operate with outdated laws, fragmented oversight structures and limited technological capacity. This uneven landscape creates weak links in a region where illicit financial flows routinely cross borders (UNCTAD 2023). Modernizing AML/CFT frameworks is therefore not a technical formality but a strategic imperative.

Robust reforms are essential for protecting consumers, safeguarding market integrity, attracting investment and sustaining Africa’s digital-finance momentum. Without stronger safeguards, the innovations that are expanding financial access could become channels for moving illicit funds on a scale that would be difficult to reverse.

Recommendations: A Practical Roadmap for Africa

Modernizing Africa’s AML/CFT systems requires a coordinated and forward-looking strategy that reflects both the continent’s remarkable digital transformation and the emerging risks that accompany it (IMF/World Bank 2025). A practical and effective roadmap must address the structural, technological and institutional gaps that currently limit the region’s ability to safeguard its financial systems.

This roadmap should begin with the establishment of unified AML standards across all major digital-finance actors. As mobile-money operators, fintech platforms, digital lenders and non-bank institutions increasingly assume roles once dominated by traditional banks, they must be brought under a common regulatory umbrella (FATF Mutual Evaluation Reports 2023). Harmonising requirements for customer due diligence, onboarding, transaction monitoring, suspicious-activity reporting and periodic audits will help ensure that every channel used to move value, whether a mobile wallet or an online lending app that operates under a coherent and predictable set of safeguards.

A second priority involves the clear and consistent regulation of VASPs. As cryptocurrency adoption accelerates across the continent, exchanges, custodians, brokers and peer-to-peer facilitators must be licensed or registered and subject to fit-and-proper standards for their management and operations. Effective supervision of these entities should include the use of blockchain-analytics tools, implementation of the FATF travel rule and robust reporting requirements. Thoughtful regulation of virtual-asset markets does not threaten innovation; it enables responsible actors to operate with greater confidence while limiting opportunities for misuse of crypto platforms for money laundering, fraud and the movement of illicit funds (Chainalysis 2023/24).

Strengthening beneficial-ownership transparency is another critical pillar of reform. Across the continent, opaque corporate structures and shell entities continue to facilitate corruption, tax evasion and illicit financial flows. Establishing verified national registries that identify the natural persons who ultimately own or control companies and trusts would significantly narrow these blind spots. When combined with penalties for non-compliance and mechanisms for inter-agency access, beneficial-ownership registries can greatly enhance the effectiveness of both AML enforcement and broader governance efforts.

Given the regional nature of many illicit financial flows, enhanced cross-border cooperation is essential. Organisations such as ECOWAS, SADC, the EAC, and the African Union have a critical role to play in harmonising supervisory approaches, developing shared watchlists, conducting joint risk assessments and creating common reporting templates for digital-payments and remittance corridors. Strengthening cross-border coordination reduces regulatory arbitrage, the practice whereby criminals route funds through the weakest jurisdiction, and enables African countries to respond more effectively to threats that span multiple markets (UNCTAD 2023).

In addition to regulatory alignment, Africa’s AML frameworks must be supported by technology-driven supervision. Regulators require advanced data-analytics tools capable of processing large transaction volumes, identifying anomalies in real time, screening against sanctions lists and mapping complex cross-border patterns, including those involving crypto assets. For smaller financial institutions and fintech firms, affordable and scalable RegTech solutions are essential to avoid imposing excessive compliance costs. When deployed effectively, technology can shift compliance from a reactive process to a proactive, intelligence-driven function.

Finally, no AML/CFT framework can succeed without sustained investment in human capital. The region faces a shortage of experienced compliance officers, investigators and supervisory personnel capable of managing the complexities of digital finance. Closing this gap will require long-term partnerships between governments, universities, regulators and international organisations to build a pipeline of skilled professionals. Certification programmes, specialised training, regulatory secondments and regional knowledge-sharing platforms can accelerate the development of this talent base and ensure that AML/CFT systems are not only well designed but effectively implemented.

Together, these recommendations provide a coherent and practical roadmap for strengthening Africa’s AML/CFT architecture. By aligning regulation with the realities of a digital-first financial system, Africa can support innovation while protecting the integrity of its markets, laying the foundation for a resilient, inclusive and secure financial.

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