CBN Plans to Cut International Transfer Costs for Small Businesses
Nigeria’s financial landscape is on the brink of a transformation that could significantly reduce the cost of cross-border payments for small businesses, thanks to a strategic push by the Central Bank of Nigeria (CBN).
At the recent Intergovernmental Group of Twenty-Four (G-24) Technical Group Meetings in Abuja, CBN Governor Olayemi Cardoso outlined ambitious plans aimed at lowering international money transfer costs, simplifying compliance, and boosting digital innovation across the payments ecosystem with particular benefits for Micro, Small, and Medium Enterprises (MSMEs).
Why This Matters: The Challenge of Costly Remittances
Cross-border payments remain a major hurdle for many African economies. On average, sending money across borders costs above 6% in fees, and transfers can take several days to settle far slower and pricier than domestic transactions. These inefficiencies are especially burdensome for small businesses that rely on international suppliers, diaspora payments, and regional trade.
For MSMEs in Nigeria, high fees and regulatory complexity can discourage participation in global commerce, stifle export growth, and limit access to foreign markets. Recognizing this, the CBN has placed cheaper, faster and safer international transfers at the core of its financial inclusion strategy.
Key Reforms to Drive Down Costs
According to Governor Cardoso, the CBN is finalizing its Payment System Vision 2028 a comprehensive blueprint to modernize Nigeria’s payment infrastructure and deepen financial integration both domestically and internationally.
Here are the key components aimed at reducing transfer costs:
- Simplified KYC/AML Rules for Small Transactions: One barrier to cross-border payments has been stringent Know-Your-Customer (KYC) and Anti-Money-Laundering (AML) requirements that often overwhelm small traders. The CBN has simplified these rules for low-value cross-border transactions to lower compliance burdens and make it easier for businesses to transact internationally.
- Real-Time, Multi-Currency Platforms: Nigeria’s National Payment Stack launched in June 2025 supports real-time payments across multiple currencies and is aligned with international messaging standards (ISO 20022). This new infrastructure reduces settlement times and offers a scalable foundation for cross-border remittances.
Read Also:Nigeria’s External Reserves Hit $49bn as Remittances Emerge as Key FX Engine
Regulatory Sandbox for FinTech Innovation
The CBN’s regulatory sandbox allows fintech firms to pilot cross-border payment solutions under supervision. This encourages innovation while safeguarding financial stability including the development of cheaper, digital remittance channels tailored to MSMEs.
Benefits for Small Businesses
The reforms aim to deliver tangible improvements for Nigerian MSMEs:
- Lower transaction costs – reducing fees on international payments makes exports and foreign receivables more profitable.
- Faster settlements — real-time processing enables businesses to manage cash flow more effectively.
- Greater inclusion in regional trade — participation in systems like the Pan-African Payment and Settlement System (PAPSS) is now more accessible for smaller enterprises.
Such changes not only support micro and small businesses but also strengthen Nigeria’s position in Africa’s expanding digital economy.
Diaspora Remittances and Broader Impact
Improving cross-border systems also boosts remittance flows a critical source of foreign exchange for many Nigerian households and small businesses. Recent CBN reforms have already enabled products like Non-Resident Nigerian Accounts, helping simplify inbound payments and encouraging greater diaspora engagement. Remittances into Nigeria currently average around $600 million per month, with prospects of reaching $1 billion as digital reforms take hold.
Looking Ahead: Risks and Opportunities
While lowering costs and broadening access are central goals, the CBN also cautions that digital payments bring risks particularly around currency substitution, foreign exchange volatility, and the regulatory complexity of new payment technologies. Striking the right balance between innovation and stability will be critical.
Conclusion
With its Payment System Vision 2028 and targeted reforms, the CBN is setting the stage for a more inclusive and efficient cross-border payment ecosystem. For small businesses, the promise of cheaper international money transfers could be a game-changer enabling wider market participation, fostering growth, and unlocking new opportunities in the global economy.
As these reforms roll out, their real test will be in how fast and fairly they reduce costs for everyday businesses and strengthen Nigeria’s role in the future of African trade.
Read Also:
- UBA Launches Diaspora Investment Platform to Link Global Africans with Wealth Creation Opportunities
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