Last week we hosted an engaging LinkedIn live session with Jack Stanton, Trader at Verto, and Terser Adamu, Host at Unlocking Africa, diving deep into how businesses are revolutionizing B2B cross-border payments in Africa. From tackling the FX risk and volatility in the emerging markets to exploring innovative solutions Verto is working on, here’s a recap of the key insights.
FX risk, volatility, and the global impact of rising interest rates
Businesses are increasingly abandoning traditional banking wires due to high costs and delays. The post-COVID world has seen an accelerated period of consumption, leading central banks worldwide to increase interest rates. For instance, Nigeria recently raised its interest rates to 27.00% for the first time in five years to encourage local investment, with further cuts expected next year. The Naira depreciated up to the 1900 level last year, but there has been gradual appreciation, with the CBN bringing the parallel market to heel and now trading between 1460 - 1490 levels.
Jack, however, mentioned how foreign aid blockages are negatively impacting Africa, contributing to environmental risks. In specific cases like Kenya, the currency has remained flat for the past 19 months.
Emerging market FX dynamics: South Africa vs. Kenya
What regional differences are there when it comes to FX risk?
According to Jack Stanton, South Africa, a G20 member, is a highly sophisticated market, yet it remains on the grey list from a regulatory standpoint and is still treated as an emerging market. It is particularly difficult to move currency out of the country and settle invoices due to restricted movement. Local businesses in South Africa converting Rand to stable coins are willing to pay a 1% premium, indicating a regulatory arbitrage despite the Rand being a liquid market.
Unlike South Africa, Kenya's Shilling has remained flat in the 129 range, with the Central Bank quickly injecting dollars to maintain this level and able to top up reserves. South Africa is also more exposed to geopolitical changes than Kenya.
Mitigating FX risk in volatile markets: challenges and Verto's solution
Businesses that export or import need invoices in local currencies. The classic case described by Jack was about dealing with volatile currencies like the Nigerian Naira, when rates can change dramatically by the time an invoice is received, so businesses try to settle transactions within 24 hours to mitigate FX risk. While hedging options are available in Europe, they are not accessible in Nigeria. In the CEMAC (Cameroon, the Central African Republic, Chad, the Republic of the Congo, Equatorial Guinea, and Gabon) region, there are concerns that whispers of devaluation could affect profit margins for businesses trading XAF.
Verto offers a solution by providing access to hedging and a platform that allows businesses to access various currencies from their local and global accounts via APIs. As a B2B payments platform offering instant, reliable, and cost-efficient ways to manage your transactions, we resolve the cross-border payments hurdles.
However, Terser dived deeper with the trust factor in B2B payments - managing FX risk and volatility effectively requires reliable information sources and implementation of simple, practical methods to maintain currency balance. Jack shared his viewpoint on how limiting exchange activity can be beneficial when volatility occurs. Additionally, staying politically aware, particularly regarding election cycles and interest rate trends, is essential. While some factors like software migration in banks are beyond direct control, preparedness and proactive measures can help mitigate their impact.
Strategies for streamlining FX payments and risk management
Verto was founded due to a significant market need - the hassle of cross-border payments - particularly from Nigeria. While we collaborate with traditional banks and utilise their infrastructure, we also employ our own API that streamlines these connections.
Jack said ‘’by working with 8-9 banks in Nigeria, Verto ensures multiple options if one bank experiences downtime. The platform itself is secure, enabling users to define specific roles, such as the operations team managing FX and the CFO overseeing fund management, thereby avoiding typical banking challenges.” Additionally, Verto hones into the information to be shared with clients about the changes happening in the market and relevant to the business needs.
Have you faced FX volatility in your market and the business is looking for a solution?
Don’t miss our next Linkedin Live on 4th November, 2025, where we will dive even deeper into optimising cross-border payments for Nigerian businesses.
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