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African banks onboard pan-African payment highway

Africa’s big banks, including the Standard Bank Group, have signed agreements to integrate the new Pan-African Payment and Settlement System (PAPSS) into their operations to allow banks to transact across borders using their own local currencies.

The agreements were signed at the Afreximbank’s 30th anniversary in Accra, Ghana.

PAPSS is the brainchild of Afreximbank, and has lured key banks such as Access Bank Group, Ecobank Group, KCB Group, Standard Bank Group and UBA Group.

According to Ethiopian news agency, The Reporter, PAPSS aims to revolutionise cross-border payments across Africa by leveraging the vast networks of partner banks.

According to the agency, these agreements are a “monumental step” towards fulfilling the vision of seamless cross-border trade payments across the nearly 40 African countries covered by the five bank groups.

Adopting PAPSS would help streamline operations, provide a secure and advanced payment system and empower businesses, according to PAPSS chief executive officer Mike Ogbalu III.

Under the agreements, the bank groups will work closely with PAPSS to integrate the system into their platforms, facilitate settlements, enrol fintech partners, and expand PAPSS access through their digital channels.

Being able to transact across borders using local currencies would significantly reduce costs and foreign exchange risks for African businesses and traders.

Afreximbank president Benedict Oramah said the agreements bring Africa “closer to domesticating cross-border payments by enabling payments for cross-border trade in African currencies”.

Wamkele Mene, the secretary general of the African Continental Free Trade Area, hailed the deals as “a bold step towards fully operationalising PAPSS for the benefit of African traders and small and medium enterprises”.

The agreements will be implemented gradually in partnership with central banks, and customers will be notified when PAPSS services become available in their countries.

The banks reportedly aim to make the service available by the end of the year.