Intra-African Trade: COMESA’s Digital Payment System Unlocks Opportunities for Egypt
Updated 10/26/2025 9:00:00 AM
On October 9, 2025, the Common Market for Eastern and Southern Africa (COMESA) announced a major evolution in its payment infrastructure—a new digital platform that allows businesses to settle cross-border transactions directly in their national currencies.
Known as the Digital Retail Payments Platform, it expands upon the existing COMESA Regional Payment and Settlement System (REPSS) and aims to reduce dependence on hard currencies like the US dollar. The initiative addresses one of the most persistent challenges in intra-African trade: the high costs and foreign exchange risks that burden cross-border transactions.
Unveiled during a COMESA summit, the platform was described by regional leaders as a “game-changer,” with pilot projects already underway in the Malawi–Zambia corridor before a full rollout to all 21 member states, including Egypt.
For Egypt, this development carries significant promise. The country strengthens its economic foothold across Africa—building on the $14 billion in trade recorded with COMESA member states in 2023, as revealed by Minister of Investment and Foreign Trade Hassan El-Khatib. It now stands to benefit from a more integrated and efficient financial network.
For years, Egyptian small and medium-sized enterprises (SMEs) have struggled to expand into African markets due to the high cost and complexity of cross-border payments. Through the enhanced REPSS framework, these businesses can now access a simpler, more cost-effective channel for regional trade, positioning Egypt to deepen its integration and competitiveness within Africa’s largest free trade area.
The core issue has been the extra expenses on trade. The high expense and operational risks associated with traditional payment methods have historically hindered Egyptian SMEs from maximizing their export potential.
REPSS offers a dual benefit of reducing financial costs and mitigating operational risks, two factors critical for the scalability and success of smaller enterprises that form the backbone of Egypt's economy, contributing 43% of its gross domestic product (GDP).
The Payment Friction: Why REPSS Is Necessary
Before REPSS, an Egyptian SME looking to export goods to a buyer in COMESA faced an expensive journey for its money. The process relied on complex correspondent banking chains, often routing payments through intermediary banks in the US or Europe. This not only added significant costs but also resulted in long settlement times that could stretch from days to weeks.
This system forced heavy reliance on letters of credit (LCs), a traditional but costly mechanism to ensure payment security. For low-margin SME trades, the fees associated with LCs and correspondent banking—estimated to add 3% to 5% to a transaction's value and the cost associated with LCs—were often prohibitive, making smaller export deals economically unviable.
REPSS changes the mechanics. The platform uses participating central banks' flows across members, reducing the need for bilateral correspondent lines and cutting the number of foreign?exchange conversions required. The Central Bank of Egypt (CBE) joined REPSS in 2017, enabling commercial banks in Egypt to clear regional payments through the CBE as a direct participant rather than routing funds via intermediaries.
Hossam Tolba, a trade official at the Commercial International Bank Egypt (CIB), notes the significance of this change. "From a banking perspective, REPSS not only reduces transaction costs but also enhances transparency and operational efficiency," he says. "By routing payments directly through the Central Bank of Egypt’s participation, commercial banks like CIB can provide clients with faster settlement times, fewer correspondent layers, and significantly lower foreign exchange exposure. This streamlining supports the government’s broader drive to anchor Egypt more deeply within Africa’s evolving payment and trade ecosystem."
The Direct Financial and Operational Dividends
The headline benefit for Egyptian SMEs lies in measurable cost savings. By collapsing long correspondent chains and limiting the need for multiple FX conversions, REPSS reduces bank charges and correspondent fees that otherwise accumulate on each transaction. Those savings flow directly to margins on export sales or can be reinvested in capacity and marketing.
Currency conversion efficiency is another underappreciated benefit. REPSS facilitates multilateral netting among participants, often reducing the number of currency conversions needed to settle a chain of trades. This not only lowers hidden conversion spreads but also reduces exporters’ exposure to exchange?rate volatility, especially when transactions are conducted in local currency in Egypt.
Moreover, REPSS fosters trust between trading partners. The security of a central bank-guaranteed system reduces the perceived risk of non-payment, allowing traders to move away from costly LCs toward more-effective mechanisms like documentary collections or even open account trading. This transition alone represents a significant cost reduction.
Strategic Market Access: The SME Gateway
With lower transaction barriers, REPSS effectively opens up previously uneconomical export opportunities. Small-volume trades that were once impractical suddenly become profitable, making the vast COMESA market—a bloc of over 580 million people—newly accessible to a wider range of Egyptian manufacturers and service providers.
This is particularly vital for high-potential sectors where Egyptian products are competitive but have been hampered by logistical hurdles. These include pharmaceuticals, processed foods, light manufacturing, fertilizers, and plastics. For these industries, REPSS facilitates not just payment but also faster and more reliable supply chains.
Tolba emphasizes the broader strategic impact. "The Digital Retail Payments Platform represents a structural leap in how cross-border trade can be financed and settled in Africa," he states. "By expanding on REPSS functionality and bringing local currency settlement into the equation, COMESA is effectively eliminating one of the biggest friction points in intra-African trade — the overreliance on hard currency clearing routes that inflated costs and created liquidity challenges. For Egypt’s SMEs, this is more than a convenience—it is a long-term enabler of competitiveness and export-led growth."
The system's strategic importance is magnified by its synergy with the African Continental Free Trade Area (AfCFTA), an initiative that Egypt actively champions. SMEs that integrate REPSS into their operations are laying the financial groundwork for seamless continent-wide trade. The system is also being positioned to interface with the Pan-African Payment and Settlement System (PAPSS), which promises to create an even more integrated financial ecosystem across all of Africa.
While REPSS dismantles financial barriers, a new layer of regulatory oversight is emerging that successful SMEs must navigate. The COMESA Competition Commission's 2024 annual report reveals an evolving regulatory environment, with a 47.4% increase in merger reviews and heightened scrutiny of the banking and digital sectors.
A clear example is the Commission's inquiry into the merger of Egypt's MaxAB with its Kenyan counterpart Wasoko, signaling that as Egyptian firms scale, they will face a robust framework designed to ensure fair competition.
The Road Ahead: Driving Adoption in Cairo
Despite these clear advantages, adoption remains a significant challenge. While the CBE has committed at a policy level, awareness and integration among commercial banks and the SMEs themselves remain key bottlenecks. Many businesses are either unaware of REPSS or face internal hurdles at their own banks to utilize the system.
Overcoming this requires a coordinated effort. The CBE, in partnership with the Ministry of Trade and Industry and private-sector bodies like the Egyptian Businessmen's Association, shall lead targeted education campaigns for SMEs. These initiatives should not only highlight the benefits but also provide practical guidance on how to onboard and process transactions through REPSS.
Streamlining integration processes within commercial banks is equally crucial to ensure a frictionless experience for exporters. These efforts align with broader government initiatives, like the MSME Development Law, aimed at reducing regulatory burdens and formalizing the informal economy to unleash SME growth.
For Egypt, which has the highest trade potential within the bloc and could increase intra-COMESA trade, the stakes are high. By embracing systems like REPSS, Egypt can empower its most dynamic enterprises to finally and fully capitalize on the immense untapped opportunities across the African continent, cementing its role as a leader in regional economic integration.
By: Sarah Samir
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