12th-Dec-2025 • Alice Wambui • Crossborder Payments
Small and Medium Enterprises (SMEs) in Kenya are increasingly venturing into international markets, seeking to expand their customer base and boost profits. However, navigating the complex world of crossborder payments can be a daunting task. This article aims to demystify crossborder payments and provide actionable insights that will help your Kenyan SME thrive in the global market.
Crossborder payments refer to transactions made between parties across different countries. These transactions involve various intermediaries, leading to high costs, delays, and complex compliance requirements. For instance, the World Bank's 2020 Global Findex Database reports that the average cost of sending $200 internationally is around 6.8%, with Kenyan SMEs paying as much as KES 13,500 (USD 127) in fees.
The high costs and complexities associated with crossborder payments can significantly impact a small business's bottom line. However, advancements in technology are paving the way for more efficient and cost-effective solutions.
Digital payment platforms like Lipabiz Technologies Ltd provide a seamless solution for SMEs looking to make crossborder payments. These platforms offer competitive exchange rates, lower transaction fees, and faster settlement times. For example, Lipabiz processes crossborder transactions within 24 hours, significantly reducing the wait time compared to traditional banking methods.
Blockchain technology is another game-changer in the world of crossborder payments. It offers a decentralized system that eliminates the need for intermediaries, reducing costs and increasing transparency. One such platform is RippleNet, which Lipabiz utilizes to facilitate fast and secure crossborder transactions.
Compliance with local and international regulations is crucial when making crossborder payments. Working with a trusted partner like Lipabiz ensures compliance with anti-money laundering (AML) and know-your-customer (KYC) regulations, protecting your business from potential penalties and reputational damage.
Streamlined crossborder payments can open new markets for Kenyan SMEs, allowing them to compete on a global scale. By embracing digital payment platforms and leveraging blockchain technology, small businesses can reduce costs, increase efficiency, and seize opportunities in international markets.