The Pan-African Payment and Settlement System (PAPSS) continues to facilitate and streamline intra-African trade since its formal launch in January 2022.
Developed by the African Export-Import Bank in collaboration with the African Continental Free Trade Area (AfCFTA) Secretariat, PAPSS is a centralized digital platform that allows African companies to pay for cross-border transactions in their local currency.
Previously, African companies and local banks relied heavily on external correspondent banks to settle payments in a third currency, such as dollars or Euros, which created significant foreign exchange and liquidity challenges for individual central banks.
PAPSS operates by connecting the real-time gross settlement systems of African Central Banks, netting the balance of transactions among individual currencies on a daily basis.
The system aims to save businesses across the continent USD 5 billion in transaction costs each year.
In its ongoing implementation phases, PAPSS has reportedly connected with 25 of the largest commercial banks on the continent, and locally licensed fintech companies are increasingly gaining access to process trade-related transactions, including on mobile platforms.
