The Common Market for Eastern and Southern Africa (COMESA) has rolled out a new initiative — the Digital Retail Payments Platform (DRPP) — designed to transform cross-border trade by enabling payments in local currencies. In this system, Zambia’s telecom provider Zamtel plays a key role in the pilot between Malawi and Zambia, helping test instant, affordable, and secure payments. The goal: cut transaction costs, reduce reliance on foreign (hard) currencies, and bring small businesses into the financial mainstream.
What Is the DRPP & Why It Matters
The DRPP represents more than just another payments tool. It’s meant to tackle several long-standing hurdles for trade in COMESA’s 21 member states: high cross-border fees, delays, currency exchange issues, and exclusion of Micro, Small & Medium Enterprises (MSMEs).
Traditionally, many cross-border transactions in the region require converting local currencies (e.g., kwacha, Malawi’s kwacha or others) into U.S. dollars or other “hard” currencies. That introduces extra cost, risk (due to volatility), and often delays. The DRPP allows traders to settle transactions directly in local currencies, avoiding conversion overheads.
Officials aim to keep transaction costs under 3% of deal value. For many MSMEs operating on tight margins, that could be transformative.
Zamtel & the Pilot Phase
Zamtel is participating in the pilot phase through the Malawi-Zambia corridor. In this corridor, the DRPP has moved from technical testing (linking the systems of the two countries) into user trials. This involves real users doing small retail cross-border transactions, using the platform to send/receive payments.
Zamtel’s role is significant: as a telecom provider with a mobile money arm, it enables many customers who may not have traditional bank accounts to access digital payment services. By integrating into DRPP, Zamtel helps ensure that mobile-money users can transact across borders, in local currency, directly.
Expected Impacts & Stakeholder Benefits
MSMEs, Women & Youth
MSMEs make up a large portion of businesses in COMESA— roughly 80% of businesses and 60% of employment in member states. These are often informal, cash-based, and excluded from efficient cross-border payment systems.
DRPP can help by reducing costs, improving predictability, and lowering barriers to trade. Women and youth entrepreneurs, who often face tighter constraints in access to finance and foreign currency, may benefit disproportionately.
Financial Inclusion & Digital Integration
Many people in rural or marginalized communities lack access to formal banking. Mobile money providers, digital financial service (DFS) players, and fintechs offer alternative routes. The DRPP supports interoperability (so banks, mobile providers, fintechs can interconnect) and enables transactions in local currencies. This increases digital financial inclusion.
Cost Savings & Efficiency
Reducing dependence on foreign currency means less exposure to exchange rate fluctuations, fewer conversion fees, and lower risk. Also, transactions may occur more quickly, with fewer intermediaries. For cross-border trade, this improves cash flow and trust.
Challenges & What Needs to Be Solved
No major innovation of this scope is without obstacles. Some of the challenges that COMESA, Zamtel, and other stakeholders will need to manage include:
- Regulatory harmonization: Different countries have different rules about foreign exchange controls, cross-border remittances, taxation, and licensing of fintechs. To make DRPP work smoothly, those must be aligned.
- Liquidity & foreign exchange risk: Even local currency systems must deal with ensuring liquidity (available currency in both ends), managing volatility, and having stable conversion mechanisms where needed.
- Technical interoperability: The systems of mobile money, banks, and fintechs must integrate seamlessly. That includes standards, APIs, security, fraud prevention etc. DRPP is being built with open-source or standard modules to help with this.
- User adoption: MSMEs, traders, especially in remote or informal sectors, need to trust the system. That means ease of access, education, low fees. Also, consistent service (few downtimes, delays) matters.
- Infrastructure & connectivity: Rural areas may have limited internet, unreliable power, or limited digital literacy. These will limit uptake unless addressed.
Broader Strategic Importance
The launch of DRPP aligns with several larger trends and strategic goals:
- AfCFTA (African Continental Free Trade Area): Increasing intra-African trade is a pledge under this framework. Efficient, cheap payments are essential to making the free trade area meaningful. The DRPP helps enable that by lowering friction in trade.
- Digital economy & fintech growth: Africa’s fintech sector has been rapidly growing. Platforms like DRPP join mobile money, e-commerce, digital remittances etc., increasing regional integration and offering new business models.
- Reducing dependency on foreign currency systems: Many shocks (currency devaluation, USD fluctuations) harm local businesses. Settling trade in local currencies keeps value within the region and lowers vulnerability.
- Strengthening regional institutions: COMESA and its financial organs, as well as local providers like Zamtel, are building capacity and credibility, which bolster regional governance, financial stability, and trust.
What Happens Next: Rollout & Scaling
The DRPP has started with the Malawi-Zambia corridor. That pilot will test not just technical integration but real-user behaviour, cost, speed, and trust metrics.
If successful, COMESA plans to expand DRPP to more corridors, then to all member states. Scaling means bringing in more banks, mobile money services, fintechs, even informal trade actors.
Governments will also need to adapt: align policies/regulations, possibly adjust foreign exchange laws, reduce barriers for digital financial services, and ensure consumer protection.
Monitoring and evaluation will also become important: tracking cost savings, time taken in payment, number of users (especially MSMEs), settled transaction volumes, error/fraud rates etc.
Role & Impact of Zamtel
Zamtel’s involvement in DRPP is especially meaningful:
- As a telecom & mobile money provider, it connects many users who may not have formal bank accounts. This means DRPP is not just about trade among big firms, but inclusion of smaller, mobile-centric enterprises and individuals.
- It helps test the operational model for mobile network-based DFS providers in a cross-border setup: settlement, reconciliation, currency conversion, user experience.
- Its participation shows that payment systems are not limited to traditional banks — mobile operators are integral, especially in Africa, to financial inclusion.
Risks & What Might Derail Success
Here are some potential risks or pitfalls that need attention:
- Currency instability: If local currencies fluctuate wildly, some traders may resist using them or demand premium, undermining trust.
- Regulatory delays: If countries lag in creating conducive laws, the platform may face fragmentation — some countries may block or heavily tax cross-border payments.
- Security & fraud risk: Cross-border payments are always a target. If DRPP fails to build strong fraud prevention, it may suffer losses or degrade reputational trust.
- Technology failures or connectivity gaps: In remote areas, power outages or connectivity issues may hamper use.
- User reluctance: Traders used to USD or other hard currencies may be sceptical. Getting them to switch requires incentives, clear benefit, and success stories.
Conclusion
The launch of COMESA’s Digital Retail Payments Platform, with Zamtel in the pilot, marks a significant watershed in regional trade integration and financial inclusion in Eastern and Southern Africa. It promises to reduce cross-border trade costs, make payments faster, include underserved MSMEs, women, and youth, and strengthen local control over trade finance.
If the pilot succeeds, and the system scales, the platform could become a blueprint for similar arrangements across Africa. It could help realize the goals of the African Continental Free Trade Area (AfCFTA), boost intra-African trade, and accelerate the digitisation of economies in the COMESA region.
The key will be in execution: regulatory alignment, infrastructure, trust, connectivity, and sustained collaboration among governments, private sector, telecoms, fintechs, and development organisations. With those in place, DRPP doesn’t just simplify payments — it could catalyze a new era of regional economic opportunity.
