With this launch, businesses and individuals can benefit from faster, more cost-effective, and secure payments without relying on correspondent banks or third-party currencies.
The Pan-African Payment and Settlement System (PAPSS), launched by African Export-Import Bank (Afreximbank) in collaboration with the African Union Commission (AUC) and the African Continental Free Trade Area (AfCFTA) Secretariat, has recorded a significant milestone in its journey towards enhancing financial integration and economic prosperity across Africa with the official launch of the platform by KCB Group in Kenya and Bank of Kigali in Rwanda.
The launches, by the Bank of Kigali in Kigali on 26th February and KCB in Nairobi on 27th February, made the two banks the first in their respective countries to integrate the transformative system into their operations, underscoring their commitment to championing intra-African trade and supporting the efforts of the AfCFTA.
KCB and Bank of Kigali customers will now be able to send and receive cross-border payments using PAPSS. The service is fully operational and accessible via the banks’ mobile applications and branch networks, enabling seamless transactions across African borders. With this launch, businesses and individuals can benefit from faster, more cost-effective, and secure payments without relying on correspondent banks or third-party currencies.
Highlighting the benefits of PAPSS to customers of KCB and Bank of Kigali, Mike Ogbalu III, CEO of PAPSS, said, “The customers will experience faster, more cost-effective, and secure cross-border transactions from the comfort of their banks’ mobile applications or through their branches. Businesses can trade more freely and competitively by eliminating the need for correspondent banks outside the continent and removing dependencies on third-party currencies. This transformation is set to unlock new opportunities for trade and investment, allowing African SMEs to access broader markets and contribute to local economies.”
Mr. Ogbalu III expressed deep gratitude to KCB and Bank of Kigali for their pioneering roles in adopting the PAPSS initiative and commended Paul Russo, KCB Group CEO, and Dr. Diane Karusisi, CEO of Bank of Kigali, “for their “visionary leadership and unwavering commitment”.
He noted that the PAPSS network, which began in 2022 in a pilot phase across the West African Monetary Zone (WAMZ), had successfully grown to include 15 central banks, over 150 commercial banks, and 14 switches, adding that the current “expansion marks a significant stride toward our goal of connecting the entire continent, ensuring that every African citizen can benefit from seamless, cost-effective cross-border transactions”.
“With only 16 per cent of Africa’s total trade occurring intra-regionally, the launch of PAPSS in Kenya and Rwanda is a significant step in unlocking the continent’s potential,” continued Mr. Ogbalu III. “We believe that this innovative financial market infrastructure will facilitate greater trade opportunities, economic growth, and financial empowerment between the Eastern African countries and the rest of Africa.”
He called on other central and commercial banks in Eastern Africa to join the PAPSS family in order to play a pivotal role in the AfCFTA as it worked to build a more prosperous and unified Africa.
Speaking on the milestone, KCB Group CEO, Paul Russo, said: “We want to play a bigger role in catalyzing trade and payments in Africa and beyond, leveraging our digital capabilities and regional footprint. Our entry into PAPSS aligns perfectly with our strategy of supporting economic growth in Kenya and across Africa by facilitating seamless financial transactions.”
Dr. Diane Karusisi, CEO of Bank of Kigali, highlighted the significance of the partnership: “This system allows people to send money quickly. For example, if someone sends Rwandan francs from Rwanda, it can reach Ghana in their local currency. The system converts the currency to meet the local requirements. Entrepreneurs in Rwanda can now receive payments instantly in Rwandan francs or USD from any member country. This service is fast, affordable, and reliable.”
About PAPSS:
The Pan-African Payment and Settlement System – PAPSS is a centralised Financial Market Infrastructure that enables the efficient flow of money securely across African borders, minimising risk and contributing to financial integration across the regions. PAPSS works in collaboration with Africa’s central banks to provide a payment and settlement service to which commercial banks and licensed payment service providers across the region can connect as ‘Participants’.
Afreximbank and the African Union (“AU”) first announced PAPSS at the Twelfth Extraordinary Summit of the African Union held on July 7, 2019, in Niamey, Niger Republic, therefore adopting PAPSS as a key instrument for the implementation of the African Continental Free Trade Agreement (AfCFTA). Further, in its thirteenth (13th) extraordinary session, held on December 5, 2020, the assembly of the African Union directed Afreximbank and the AfCFTA secretariat to finalise, among others, work on the Pan-African Payments and Settlements System (PAPSS). The 35th Ordinary Session of the Assembly of the AU further directed the AfCFTA and Afreximbank to deploy the system to cover the entire continent. PAPSS was officially launched in Accra, Ghana, on January 13, 2022, thus making it available for use by the public.
For more information, visit: www.PAPSS.com.
*Source Afreximbank
