• New system will link banks, fintechs, and mobile operators in a single platform
• Real-time transfers and payments to be available 24/7 across all channels
• Platform aims to boost financial inclusion and reduce transaction costs

West Africa will soon launch a regional Interoperable Instant Payments System (IIPS), connecting all licensed financial institutions in the West African Economic and Monetary Union (WAEMU)—including banks, fintechs, microfinance institutions, and mobile money operators—through a unified platform. The initiative, led by the region’s central bank BCEAO, is set to go live on September 30.

The platform is designed to enable faster, more accessible, and fully interoperable payments across all service providers and channels, whether via bank accounts, mobile money, or digital wallets. It is expected to unify a currently fragmented payment ecosystem.

A Push to Expand and Accelerate Transactions

The IIPS is based on a centralized switching mechanism that will interconnect financial institutions, allowing them to exchange payments directly without relying on workaround gateways to overcome incompatibility. This will enable a range of real-time operations. Examples include instant transfers between bank accounts and mobile wallets, cross-network mobile payments, automated merchant transactions, and real-time salary or social aid disbursements. Until now, interbank transfers in the region could take up to 48 to 72 hours. With IIPS, they will be processed almost instantly.

Impacts, Opportunities, and Challenges

Other expected impacts for WAEMU’s financial system include lower transaction costs for users, greater financial inclusion through mobile access for the unbanked, and more innovation, as banks and fintechs gain a flexible framework to develop tailored services.

Yet, several challenges remain. Financial institutions will need to undergo complex IT integration processes, and the risk of cyberattacks continues to rise in the AI era. In addition, traditional money transfer services may see declining revenues as users shift to faster, cheaper interoperable channels. Intermediaries that benefit from the inefficiencies of the current system could also face shrinking margins.

Still, industry players remain optimistic. “This project is much more than a technical reform. It is a strategic lever for a more open, inclusive, and resilient financial system. Public, private, and tech players now have a chance to co-build a unified financial ecosystem in West Africa that serves both growth and impact,” said Patrick Zady, managing partner at Kiffy Partners.

The IIPS is the result of a process launched in January 2024, following BCEAO’s Instruction 001-01-2024 on payment services in WAEMU. The directive requires all payment service providers to offer instant payment options, regardless of account type.

The initiative comes amid steady progress in financial inclusion. In 2022, the traditional banking rate in WAEMU stood at 24.3%. When including microfinance institutions and mobile accounts, the figure rose to 70.9%. The IIPS platform could further boost access to financial services across the region.

Several pilot phases were carried out between July and August 2024 to test the system’s reliability. Its scheduled launch in late September will mark a major step toward a more unified, accessible, and connected financial space in West Africa.