By Ajong Mbapndah L*
Africa is quietly building a new cross-border payments rail—one designed to collapse transaction costs, reduce settlement delays, and unlock a new era of intra-African trade. At the center of that shift is the Pan-African Payment and Settlement System (PAPSS), a financial infrastructure project that is beginning to redefine how money moves across 54 economies long divided by currency fragmentation and costly external dependencies.
For decades, moving money across African borders has meant routing transactions through offshore correspondent banks, often in Europe or the United States. A payment from Lagos to Nairobi could travel through London or New York, incurring multiple foreign exchange conversions, high fees, and delays that made intra-African trade unnecessarily expensive and inefficient.
PAPSS is designed to eliminate that friction. Launched in 2022 by Afreximbank in partnership with the African Union and the AfCFTA Secretariat, the system enables instant cross-border payments in local currencies. Instead of converting naira into dollars and then into Kenyan shillings, transactions can now be settled directly between African financial institutions, with PAPSS providing the clearing and settlement backbone.
“PAPSS is about removing the structural barriers that have historically made intra-African payments slow and expensive,” says Mike Ogbalu III, Chief Executive of PAPSS. “We are creating a system where payments can be made and received in local currencies, instantly, without reliance on third-party currencies.”
That shift is more than technical—it is strategic. At its core, PAPSS functions as a continental clearing house, linking central banks, commercial banks, payment switches, and fintech platforms into a unified financial network. Afreximbank underwrites the system with liquidity support, ensuring transactions can settle efficiently even across markets with uneven currency depth.
The result is the gradual emergence of what industry observers increasingly describe as Africa’s own financial rail—a system that mirrors the efficiency of domestic instant payments but operates across borders.
This matters because while Africa has made significant strides in domestic digital finance, cross-border interoperability has lagged behind. Mobile money platforms have transformed payments in countries like Kenya and Ghana, while fintech ecosystems in Nigeria, Egypt, and South Africa have scaled rapidly. Yet moving money between these markets has remained complex, fragmented, and costly.
“Payments are the backbone of trade,” says Benedict Oramah, President of Afreximbank. “If you cannot move money efficiently across borders, you cannot fully unlock the potential of the African Continental Free Trade Area.”
That is precisely the gap PAPSS is trying to close.
By providing a shared infrastructure layer, the system allows banks and fintech companies to plug into a continental network rather than building expensive bilateral corridors market by market. For financial institutions, this reduces reliance on correspondent banking relationships. For fintechs, it opens a pathway to scale products across multiple countries without rebuilding payment rails each time.
The implications for Africa’s fintech sector are significant.
As startups increasingly aim for pan-African reach, infrastructure—not innovation—has become the bottleneck. PAPSS addresses that constraint directly by acting as an interoperability layer, enabling seamless movement of funds across jurisdictions.
A senior executive at a West African fintech firm integrating PAPSS describes the shift as foundational. “For the first time, we can think about scaling across Africa without redesigning our payments architecture for every country. That changes the economics completely.”
Adoption is already gaining momentum.What began as a pilot with a handful of banks has expanded into a growing network of central banks, commercial lenders, and payment providers across West, East, Central, and Southern Africa. Regional banking groups such as KCB Group and Bank of Kigali have begun enabling PAPSS transactions, signaling alignment between traditional banking infrastructure and new digital payment rails.
Central banks are also playing a critical role by connecting national payment systems to the platform—an essential step in enabling real-time clearing and settlement in local currencies. As more jurisdictions come online, the network effect strengthens, bringing the vision of a continent-wide payments grid closer to reality.
Still, the road ahead is not without challenges. Regulatory frameworks remain uneven across jurisdictions, requiring coordination between central banks and policymakers. Currency liquidity varies significantly between markets, which can affect settlement efficiency. Integration with legacy banking systems also demands time, investment, and technical alignment.
But the direction of travel is clear.
“PAPSS is not here to replace existing systems,” Ogbalu says. “It is here to connect them—to create a seamless payment environment that supports trade, investment, and economic integration across Africa.”
That integration is central to the success of the African Continental Free Trade Area, which aims to boost intra-African trade by reducing tariffs and barriers. Yet trade cannot scale without efficient payment systems. By lowering transaction costs and reducing settlement delays, PAPSS provides the financial infrastructure needed to operationalize AfCFTA’s ambitions.
In that sense, PAPSS is not just a fintech solution—it is economic infrastructure.
It represents a broader shift in how Africa is approaching financial sovereignty. For decades, the continent has relied on external systems to process its own transactions, reinforcing dependencies on global financial networks and foreign intermediaries. PAPSS signals a move toward internalizing that capability, allowing African economies to settle trade within their own financial ecosystem.
The system’s long-term success will depend on scale. The more institutions that join, the more corridors that open, and the more transactions that flow through the network, the stronger its value proposition becomes. Early momentum suggests that tipping point may be within reach.
For now, PAPSS is evolving from a promising concept into a functioning reality—one connection, one transaction corridor at a time.
If that trajectory continues, it could become one of the most consequential financial infrastructure developments in modern African history: a digital rail linking 54 economies, enabling money to move across borders as easily as it does within them, and turning the promise of intra-African trade into something far more tangible. In a continent long defined by fragmentation, PAPSS is building something different. A system designed not just to move money—but to move Africa forward.
*Culled from May Edition of PAV Magazine
