TMCs and corporate travel buyers continue to struggle with cross-border transactions across Africa, due to limited financial infrastructure and inconsistent adoption of new payment solutions.
"Payments in Africa – particularly for accommodation – remain a key challenge for travellers and travel programmes,” said Mummy Mafojane, GM of FCM.
Joey Kganyago, Corporate Travel Manager at the Industrial Development Corporation of South Africa, said one of the biggest issues was inconsistent card acceptance across regions.
“West Africa faces ongoing MasterCard acceptance limitations, while many establishments across the continent are reluctant to accept American Express cards due to perceived higher merchant fees rather than actual operational constraints,” explained Mafojane.
“Additionally, we encounter SARB compliance challenges with invoice documentation when processing SWIFT payments, alongside payment challenges in Zimbabwe and Mozambique stemming from historical difficulties.”
Payment delays are another recurring frustration. Kganyago said that, despite a card transaction reflecting as successful on the buyer’s side, suppliers sometimes insisted they had not received funds. “One supplier said that when we pay with credit cards, they have to wait a while for the bank to actually transfer the money into their account, so sometimes they will say payment is not done whereas on my end it shows that the card was charged and the transaction was successful,” she said.
Mafojane added that heightened fraud risks and stricter security systems were also increasing monitoring requirements in certain regions, slowing processes further.
As a result, many corporates preferred to rely on TMCs and tour operators when booking in Africa, as they had better relationships with hotels and other suppliers in their network, enabling them to resolve payment issues, said Kganyago.
Virtual card adoption
While virtual credit cards (VCCs) help address some of these challenges, a lack of consistent adoption among African suppliers has prevented the full benefits of the technology from being realised.
“Clients are either using their own VCCs – or we use ours to pay suppliers. Momentum is building around VCCs, but integration and reconciliation issues need to be overcome, alongside supplier adoption, which remains slow,” said Mafojane.
She explained that the slow adoption of VCCs among suppliers was largely due to the higher transaction costs. Suppliers are charged an additional VCC surcharge over and above international transaction fees for every transaction carried out with a VCC.
“Merchant fees also need to be more equitable, as VCCs carry higher costs. Banks must work closely with suppliers and TMCs to address this fee disparity to accelerate broader adoption,” said Mafojane.
Another challenge seen with the adoption of VCCs is fear among suppliers due to a lack of education on the benefits of the technology.
“The benefits are clear: instant payment to suppliers, easy reconciliation, and reduced fraud risk. There is resistance among suppliers to adopt and this is due to a lack of understanding and trust of the VCC. These suppliers also lack payment infrastructure and prefer EFT and cash to manage cashflow,” said Kganyago.
