Why Regulation Is the Secret Ingredient To Innovation

If you’ve ever tried to build something new, really new, you know that innovation isn’t only about what’s possible. Often, it’s about what’s allowed.

At Flutterwave, we started with a simple belief: that sending and receiving money across Africa shouldn’t be harder than sending a text message. But when we began, cross-border payments were seen as too fragmented, too risky, too complicated. It was a brave – maybe even crazy! – idea to try and fix that.

And yet, here we are. Billions of dollars are moved every year. Because we dared to build, and because we had the permission to try. That second part, the permission, is where regulators come in.

Despite what some may think, regulators aren’t obstacles to innovation; they are its co-architects. At their best, they don’t slow innovation down; they help focus it. They create the guardrails that allow bold ideas to become safe realities for us all.

Innovation doesn’t always begin as some grand, clear vision. Sometimes, it starts small, with a pivot or a problem solved internally. But what transforms those sparks into systemic change is the environment around them, especially regulation.

Take Brazil’s Pix, for example. Launched by the Central Bank in 2020, Pix wasn’t just another payment app; it was a national instant-payments rail. The rules made it simple, free for person-to-person, and mandatory for big banks to join. In just two years, over 150 million Brazilians were using Pix, more than credit cards, more than cash. Retailers embraced it because they kept more of each sale, paying lower fees than with traditional card networks. Customers loved it because money moved instantly, no waiting days for transfers or refunds, making payments both faster and easier. That kind of adoption wasn’t luck. It was regulation building the rails and then inviting innovators to ride them.

Brazil went further with Open Finance. By setting standards for secure data-sharing across banks, insurers, and fintechs, regulators turned rivals into collaborators. APIs became the common language. Suddenly, consumers could access smarter, more personalized financial services because regulators made openness the rule, not the exception.

Nigeria also provides a powerful case study in what’s possible when regulation leans forward. In 2011, the Nigeria Inter-Bank Settlement System (NIBSS) launched the NIBSS Instant Payment (NIP) platform. NIP wasn’t just a new product; it was a pioneer effort that fundamentally changed how people paid, received, and transacted in Nigeria. It made instant, 24/7 transfers possible – no delays, no waiting for banking hours. It is one of the most celebrated instant payment solutions in the world and today remains the backbone of Nigerian commerce. From individuals sending money to loved ones, to businesses accepting real-time payments, NIP unlocked a new era of digital commerce, efficiency, and trust in the financial system.

And it doesn’t stop there. With Payment Service Bank licenses, Nigeria invited telcos and retail groups into the financial system, expanding who could serve the unbanked. The Regulatory Sandbox gave fintechs a safe space to test, learn, and launch under supervision. Even the capital markets got a boost with the SEC’s Regulatory Incubation program, letting startups trial new ideas for trading and investment with real users, but within guardrails.

Across all these examples, one theme emerges clearly: innovation flourishes when systems, especially regulatory ones, allow room for iteration, learning, and change. It’s not about lowering the bar for safety or compliance. It’s about being adaptive, responsive, and intentional.

Across Africa, we need to further embrace that kind of regulatory boldness. Because innovation on this continent doesn’t look like innovation elsewhere. It’s not about convenience upgrades, it’s about solving real, foundational problems. It means building where there’s no map. It means imagining systems where none exist. And it means having a shared vision between startups and states, entrepreneurs and enablers.

That’s why I believe one of the most powerful tools we have to unlock African innovation today isn’t just a new app or API, but also policy.

The African Continental Free Trade Area (AfCFTA) is a perfect example. With over 1.3 billion people and a $3.4 trillion market, it’s the largest free trade agreement in the world by number of countries. It promises to reshape how we trade, collaborate, and grow as a continent. But to deliver on that promise, we need more than ambition; we need to effectively utilise the infrastructure we have today.

Right now, many African businesses still struggle with fragmented systems, slow settlement times, high currency conversion costs, and regulatory disconnects between markets. These challenges not only block trade, they block growth. But they’re also solvable.

The opportunity here isn’t just bigger trade volumes; it’s new ways of doing business. The AfCFTA is already pushing governments, regulators, and private companies to innovate around logistics, digital platforms, and, most critically, payments. A seamless payment layer is the foundation for any borderless market. Without it, the promise of free trade remains theoretical. With it, African entrepreneurs can scale faster, reach new customers across borders, and compete globally with fewer barriers.

Flutterwave is already building the payment rails that make this possible. Our network processes billions in transactions across 30+ African countries, connecting small businesses to global markets and enabling fast, multi-currency payments at scale. Merchants can onboard in minutes, stay compliant with AI-powered KYC, and even reach customers offline where digital access is limited. Just as importantly, our infrastructure aligns with regulatory standards and helps bridge gaps across borders – laying the foundation AfCFTA needs to thrive. We’re doing it through partnerships, technology, and a deep belief in Africa’s potential.

The good news is, we’re not starting from zero. The CBN has already made great strides with sandbox programs, digital currency exploration, and fintech frameworks. But the next chapter calls for even more collaboration, more interoperability, and more courage to rethink how we regulate innovation.

We have the talent. We have the tools. And we have the timing.

Regulators aren’t on the sidelines of Africa’s innovation story; they’re in the driver’s seat. When they move with vision and partnership, we all move faster. At Flutterwave, we’re proud to build alongside them. We’re not just building for today, we’re building for the Africa of tomorrow.

This article was written by Olugbenga ‘GB’ Agboola, Founder & CEO, Flutterwave