Pilot Launch | REasy: Boosting micro-merchant incomes through stablecoin-powered cross-border payments
Image Courtesy of REasy
Mercy Corps Ventures and REasy launch a new pilot to study increased cost savings obtained from cross-border payments on the profits and working capital of African SMEs.
This post is the first of a two-part series; the second blog will share key insights after the pilot is completed. Written by Njeri Muhia, Pilot Manager at Mercy Corps Ventures.
Micro, Small, and Medium Enterprises (MSMEs) are the lifeblood of Africa’s economic development. They contribute over 50% of GDP and employ around 60% of the workforce across the continent. These businesses play a crucial role in poverty reduction by providing income opportunities and driving innovation. However, the majority of African MSMEs operate in the informal sector, lacking formal registration and access to traditional banking systems. This financial exclusion hinders their potential for growth and restrains economic progress.
Despite limitations, African MSMEs are increasingly engaging in cross-border trade, where Asia accounts for over 40% of both Africa’s exports and imports, showcasing the continent’s growing integration into global supply chains. This trend is positive, but it’s hampered by the current financial infrastructure, which often excludes informal MSMEs, making it difficult and expensive to make international payments.
The lack of accessible and affordable payment options forces many MSMEs to resort to informal channels, often referred to as the “black market.” Over 60% of financial transactions for cross-border trade by African MSMEs are estimated to happen outside formal banking systems. These alternative networks involve opaque intermediaries who charge exorbitant fees — up to 20% per transaction — significantly eroding the already tight margins of these businesses.
The Pilot
Through this pilot, micro-merchants in Cameroon will be offered a new way to pay suppliers that are based in China, using stablecoins to achieve quicker and cheaper transactions.
Customers can recharge their accounts via several options including mobile money, bank transfers, and cash deposits. Thereafter they can make transfers to suppliers that will be settled nearly instantly, which will be 5–10% cheaper enhancing working capital management for growth. Suppliers in Asia will similarly have multiple options for the receipt of funds, including Alipay and WeChat Pay, which have a combined active user base of over 2 billion in China.
Key Partner
REasy helps African SMEs pay their suppliers worldwide quickly and securely. The platform combines payment gateways, stablecoins, and a mobile app to provide a seamless payment experience with near-instant settlement.
‘Our mission at REasy is to help small informal entrepreneurs be more easily included in global trade by providing them with a user-friendly and cost-effective solution. We are a global company with a physical presence in Africa, Europe, and Asia, which allows us to establish strong partnerships both within traditional banking systems and with web3 companies. The use of stablecoins is becoming increasingly common in Africa, and through this pilot with Mercy Corps Ventures, we will assess its impact on informal entrepreneurs.’
Wing Hang Mathieu, Co-Founder and Co-CEO of REasy
Our Hypotheses
The pilot will enable cost savings from the use of stablecoins for cross-border payments, which will result in improvements in income, profits, and working capital for African merchants. We will measure:
% increase in profits for micro-merchants
% increase in working capital
% change in speed of delivery of goods
This pilot will provide an easy-to-use app interface that will result in a better user experience. We will measure:
Retention rate / repeat transaction rate
Net Promoter Score from app users
Google Play Store app rating
This pilot will explore innovative ways to expand financial inclusion and facilitate cross-border payments for underserved SMEs in Africa. By providing these businesses with secure, efficient, and affordable payment options, we can reduce their reliance on informal channels that impose exorbitant fees. This will allow them to allocate more resources to their core operations, invest in growth, create jobs, and increase resilience to climate shocks. Furthermore, facilitating cross-border payments will enhance Africa’s integration into global supply chains, enabling MSMEs to access larger markets and expand their customer base.
Stay tuned for updates, evidence, and insights on our other Mercy Corps Ventures pilots, responsibly testing web3 solutions for unbanked and underbanked populations in emerging markets.
