- Why Faster Yuan Settlement Could Matter More to African SMEs than Lower Transfer Fees
Africa’s rapidly expanding trade with China is forcing banks and financial-technology companies to confront a weakness that has long remained hidden behind headline trade figures: the difficulty African businesses face in paying Chinese suppliers predictably, transparently and at an affordable total cost.
Trade between China and Africa reached a record US$348 billion in 2025, according to China’s General Administration of Customs, extending China’s position as the continent’s largest trading partner for a 16th consecutive year.
Yet the financial infrastructure supporting that commerce remains fragmented. Payments can travel through several banks, currencies and compliance systems before reaching a Chinese supplier, creating delays, unexpected charges and exchange-rate losses.
For large corporations with treasury departments, these complications can be managed as part of routine international operations. For small African importers, the uncertainty can delay production, hold up shipments and lock scarce working capital inside transactions whose completion time is unclear.
Grey, a cross-border financial-services company, is seeking to address part of that problem by introducing Chinese yuan payouts that allow customers to send funds directly to Chinese bank accounts.
The product reflects a broader movement by African financial institutions towards direct yuan settlement as trade with China deepens and businesses look for alternatives to payment routes that depend heavily on the US dollar.
The significance extends beyond whether a transfer is cheaper or faster. The real commercial value may lie in giving businesses certainty over the exchange rate, charges, amount received and expected settlement time.
For an African importer, paying a Chinese supplier is not a separate administrative task. It is a critical stage in the movement of goods.
A manufacturer may need to pay before machinery or production inputs are released. A retailer may be unable to replenish stock until the supplier confirms receipt. An ecommerce business can lose sales if inventory remains at a factory or port because a transfer has not cleared.
“The difficulty for the business is having limited visibility while the payment is being processed, particularly when the supplier is waiting for it before releasing an order,” said Joseph Femi Aghedo, Grey’s co-founder and chief operating officer.
“There is the transfer fee and the cost of currency conversion, but there is also the time a business owner spends following up on a payment or resolving a problem. Money in transit may also be money the business cannot use to restock or meet another commitment.”
This broader understanding of cost is important. Payment providers commonly advertise visible transaction fees, but that figure may exclude intermediary-bank deductions, exchange-rate margins and the economic consequences of delayed settlement.
A business operating with limited working capital may borrow while waiting for a payment issue to be resolved. It could also lose a supplier discount, miss a shipping schedule or be forced to charge customers more to absorb uncertainty.
Cross-border payment reform should therefore be assessed according to the full commercial outcome rather than the price displayed before a customer confirms the transfer.
Many Africa–China transactions have historically been invoiced or settled through the US dollar, even when neither party operates primarily in the American currency.
An African importer may convert local currency into dollars, transfer the dollars through correspondent banks and allow the Chinese recipient or its bank to convert the funds into yuan.
Each conversion introduces a potential cost. The transaction can also depend on access to dollars in the importer’s domestic market, where foreign-exchange shortages or administrative restrictions may delay execution.
The dollar remains dominant because it offers deep liquidity, broad acceptance and established banking infrastructure. Replacing it is not as simple as encouraging businesses to select another currency.
A direct yuan corridor must provide competitive exchange rates, sufficient liquidity and reliable settlement. African businesses must also be able to source yuan without first passing through the dollar, or the apparent simplification merely moves the conversion into the background.
Grey’s service allows customers to initiate payments from supported balances, enter the Chinese recipient’s banking details and review the transaction before confirming it.
Behind that interface, the company must coordinate payment partners, currency access, local banking connections and regulatory checks across jurisdictions.
“The customer starts with a supported balance in Grey, adds the recipient’s Chinese bank-account details and reviews the payment before confirming it,” Mr Aghedo said.
“Behind that experience, payment partners, access to the required currencies and local bank-payment connections need to work together.”
The simplicity experienced by the customer therefore depends on a complex institutional network remaining liquid, compliant and operational.
Grey’s expansion is occurring alongside a larger shift in African banking towards China’s Cross-Border Interbank Payment System.
Ecobank, which operates in 34 African countries, has announced plans to join CIPS to support direct yuan settlement. Chief Executive Jeremy Awori said the connection would strengthen the relationship between Chinese renminbi-payment infrastructure and African banking and commerce.
CIPS connects more than 5,000 banks across more than 100 countries and territories. Ecobank is also discussing jointly offered yuan-settlement services with the Bank of China.
South Africa’s Standard Bank became the first African lender to connect to CIPS in November 2025, while Rwanda’s Bank of Kigali has also joined and Angola’s Banco de Fomento is planning a connection.
These moves demonstrate that direct yuan settlement is shifting from a specialised service into a strategic banking capability.
For pan-African banks, the opportunity is considerable. Institutions that establish credible yuan liquidity and payment connections can serve importers, exporters, Chinese contractors and multinational companies operating across multiple African countries.
Fintech companies can provide more accessible interfaces to smaller firms, while banks supply the regulated settlement accounts, foreign-exchange capacity and correspondent relationships behind the transactions.
The emerging model is therefore more likely to involve partnerships between banks and fintechs than outright replacement of one by the other.
The strongest feature of Grey’s argument is its emphasis on predictability.
“Cost matters because it affects margins. Speed matters because a supplier may be waiting for payment before starting production or releasing goods,” Mr Aghedo said.
“Knowing the amount the supplier will receive and the expected delivery time helps the buyer coordinate that next step.”
For smaller companies, predictable execution may be more valuable than marginally lower fees.
An importer can price goods accurately when the exchange rate and total deductions are known in advance. A supplier can schedule production when settlement timing is reliable. Shipping can be arranged without building excessive delays into the process.
This becomes particularly important for businesses making weekly or monthly payments. A small inefficiency repeated frequently becomes a structural cost that reduces competitiveness.
However, providers will need to demonstrate performance through measurable service standards. Customers should know what percentage of transactions arrives within the stated time, how often transfers require additional documentation and how disputes or failed payments are resolved.
A promise of predictability must ultimately be supported by transaction data.
The move towards yuan settlement should not be interpreted as a complete answer to Africa’s payment challenges or an immediate displacement of the dollar.
The yuan is not fully convertible, and China maintains controls over cross-border capital flows. Liquidity between many African currencies and the yuan remains limited, potentially creating wide exchange-rate spreads.
African importers could also face currency mismatch. Businesses generally earn revenue in local currency while paying suppliers in yuan. A sudden depreciation of the naira, cedi, rand or shilling would still raise the local-currency cost of imports.
Direct settlement may remove one conversion, but it does not eliminate foreign-exchange risk.
There are also geopolitical considerations. CIPS is part of China’s effort to internationalise the renminbi and reduce dependence on Western-controlled financial infrastructure.
African countries may benefit from a more diversified payment system, particularly when trade flows increasingly point east. But dependence on any single foreign currency or financial network creates strategic exposure.
The sensible objective should not be to exchange dollar dependence for yuan dependence. It should be to give businesses multiple reliable settlement choices and allow them to select the currency matching the underlying transaction.
Ghanaian importers source substantial volumes of machinery, electronics, vehicles, construction materials and consumer goods from China. Payments for those imports contribute to corporate foreign-exchange demand and pressure on the domestic dollar market.
Direct cedi-to-yuan or efficiently structured yuan-payment services could reduce the need for some businesses to acquire dollars merely as an intermediary currency.
That would not remove Ghana’s underlying demand for foreign exchange. Yuan must still be sourced, and the country’s trade balance with China will continue to influence the net requirement.
The benefit would come from reducing unnecessary conversion, increasing transparency and potentially improving settlement speed.
For Ghanaian banks, joining yuan-payment infrastructure could create commercial opportunities, but only if supported by sufficient liquidity and competitive pricing. A technically direct corridor that applies a wide exchange-rate margin would provide limited benefit to customers.
The Bank of Ghana would also need to ensure that settlement innovation does not weaken foreign-exchange reporting, anti-money-laundering controls or capital-flow oversight.
Africa’s trade relationships have changed faster than much of its financial plumbing.
Businesses can identify suppliers through digital marketplaces, negotiate through messaging applications and track shipments electronically. Yet completing payment may still require lengthy forms, intermediary banks and uncertain currency conversion.
Grey’s yuan-payout service and African banks’ growing participation in CIPS represent attempts to align the payment system with the geography of trade.
Their success should be judged not by the novelty of offering yuan transfers but by whether African businesses receive better exchange rates, clearer fees, faster resolution and reliable confirmation that suppliers received the agreed amount.
As Mr Aghedo observed, the objective should be to make international payments feel less international understandable, trackable and repeatable for businesses without specialised finance departments.
China and Africa have already built a US$348 billion trading relationship. The next challenge is ensuring that the money supporting those transactions moves as reliably as the goods.
