From financial inclusion to global trade: How is PayPal betting on digital growth in Africa?

Written by: Mohammed Omran

In a move that could strengthen Digital transformation Regarding financial inclusion in the African continent, PayPal announced the expansion of its stablecoin, the “PayPal US Dollar” (PYUSD), to include 70 global markets, including a number of African countries.

Digital transformation and financial inclusion in Africa

This move is seen as an opportunity to facilitate and reduce the cost of cross-border financial transfers, at a time when businesses and individuals in Africa are facing challenges related to the speed and high fees of international payments.

How is PayPal betting on digital growth in Africa?

The availability of a dollar-backed digital currency is expected to accelerate financial settlement processes, improve African companies’ access to global markets, and provide a more stable and flexible means of conducting international transactions, thereby supporting the growth of e-commerce and the digital economy on the continent.

PayPal, the American electronic payments giant, is taking another step in its digital currency strategy by launching its PayPal US Dollar (PYUSD) currency globally in 70 markets, including several African countries.

By facilitating fast and low-cost international transfers through this stable, dollar-backed currency, the company aims to make global trade easier, smoother, and more inclusive for individuals and businesses alike.

On May 20, PayPal announced the launch of its US dollar stablecoin (PYUSD) in 70 markets for PayPal accounts. This dollar-backed stablecoin allows users to send money globally, with faster settlement and lower costs compared to traditional payment methods.

As global trade increasingly relies on digital technology, individuals and businesses are seeking faster and more seamless ways to conduct cross-border transactions. Stablecoins like PYUSD contribute to supporting a comprehensive, fast, and low-cost global trading system.

“People and businesses around the world are looking for faster, more convenient ways to transact globally, and the current system is still expensive, time-consuming, and suffers from settlement delays,” said May Zabaneh, senior vice president and general manager of digital currency at PayPal. “We are working to change all of that.”.

Activating the PYUSD currency in 70 markets allows users faster access to their funds, cheaper ways to send money internationally, and a more direct way to participate in the global economy, which drives trade forward for everyone.”

Otto Williams, PayPal’s senior vice president and general manager for the Middle East and Africa, said: “The launch of PayPal’s US dollar currency (PYUSD) in Africa delivers tangible value to the individuals and businesses that drive growth in these dynamic markets.

Individuals gain a flexible and stable way to transfer money more quickly, while businesses can streamline cross-border payments, improve settlement times, and create new growth opportunities.

By increasing access to a regulated digital currency backed by the US dollar, we are removing barriers and helping to reduce friction in global trade across the region.”

Users of the newly supported marketplaces can buy, save, send, and receive PYUSD directly from their PayPal accounts. In addition, eligible users can earn rewards on their PYUSD balances, transfer funds to friends and family via PayPal or third-party digital wallets, and convert PYUSD to their local currency when withdrawing funds to cover daily expenses.

Businesses that accept PYUSD can access funds within minutes, rather than days or weeks, boosting liquidity and reducing reliance on traditional settlement cycles. Faster access to funds also helps businesses manage working capital, support cross-border operations, and participate in global trade.

A crucial new step towards creating a more inclusive global business ecosystem

Following the launch of PYUSD in the United States in 2023, this expansion represents another crucial step towards building the liquidity, efficiency and reach needed to create a more inclusive global trading system.

By making it available in new markets via PayPal, PYUSD helps individuals send money abroad at a lower cost, and enables businesses to settle payments faster, reduce international payment fees, and access funds more quickly.

The PYUSD test is now available in many regions of the world, namely Africa, Asia Pacific, Europe, Latin America, the Middle East and North America.

A stable, regulated currency backed by the US dollar

PayPal USD is issued by Paxos Trust Company, NA, a fully licensed trust company regulated by the Office of the Comptroller of the Currency (OCC), and PayPal USD reserves are fully backed by U.S. dollar deposits, U.S. Treasury securities, and cash equivalents.

PayPal USD can be bought or sold via PayPal and Venmo at a price of $1.00 per PayPal USD.