How Outdated Payment Systems Are Slowing Supply Chains, and Why Instant Settlement Is the Future

Same-day deliveries and real-time tracking have completely changed what consumers expect, but the real challenge in African and global supply chains goes beyond just logistics. It's the outdated payment systems that are holding everything back. Despite massive technological strides in production, inventory management, and shipping, many supply chain transactions still rely on outdated payment infrastructure, including delayed settlements, excessive fees, multiple intermediaries, and a lack of transparency. These inefficiencies have consequences, especially in Africa and emerging markets, where payment rails can be even more fragmented.

The Cost of Delay

When a business orders goods from an overseas supplier, the payment often passes through several correspondent banks before it reaches the recipient. According to the McKinsey Global Payments Report of October 2024, consistent with findings from the 2024 World Bank study, cross-border B2B payments can take 3 - 5 business days on average to settle, and even longer in emerging markets, especially if it's a weekend or a public holiday. During that time, goods may be stuck in limbo, awaiting payment confirmation before being released or shipped.

This delay isn't just inconvenient; it's costly. Businesses tie up capital while waiting for transactions to clear, and suppliers face uncertainty around cash flow. This friction can be the difference between meeting demand and losing customers in fast-moving markets. Also, currency volatility during settlement delays can affect the final amount received, adding another layer of risk, especially for importers and exporters working across borders with tight margins.

Why Instant Settlement Matters

The ability to send and receive value in real-time (instant settlement) offers an alternative that eliminates unnecessary delays, reduces business risks, and increases transparency and trust between trading partners. This means faster inventory turnover, restocking, and better working capital management for supply chains. Since payments arrive predictably and securely, this will strengthen the relationship between buyers and suppliers.

The African Challenge and Opportunity

The 2024 African Trade Report from the Africa Export-Import Bank shows that in 2023, intra-African trade accounted for 15% of the continent's total trade, up from 13.6% in 2022. However, despite the upward trend, intra-African trade remains low compared to other regions, with intra-Asian trade at 58% and intra-European trade at 68%.

Despite growing intra-regional trade, Africa remains stifled by limited access to efficient cross-border payment solutions. On the other hand, global businesses are eager to tap into African markets and suppliers. That's where payment options that can facilitate instant settlements come in, bridging the gap between traditional banking infrastructure and the real-time demands of modern commerce.

An Efficient Way Forward

Yellow Card's Commercial Desk offers an efficient solution for businesses operating in or with African markets. Designed for institutional and corporate players, the Commercial Desk facilitates large-value, cross-border settlements that leverage digital assets. This allows businesses to move value instantly and securely across borders without relying on slow and expensive intermediaries. Whether it's paying suppliers in Ghana, sourcing goods from Kenya, settling invoices in South Africa, or even moving value and invoice settlements from Africa to overseas, Yellow Card's Commercial Desk simplifies the process, ensures compliance, and accelerates trades between partners, giving the Supply Chain industry a strategic advantage in a world where speed, trust, and flexibility define success.

As supply chains become more global and time-sensitive, instant settlement is no longer just a convenience; it's a necessity. Forward-thinking businesses are re-evaluating their financial infrastructure with the same urgency they apply to logistics and procurement. Those who adapt quickly by partnering with solutions like Yellow Card's Commercial Desk stand to unlock faster growth, better efficiency, and stronger global partnerships.

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