The Pan-African Payment and Settlement System (PAPSS), Africa’s first continent-wide digital system for goods and services payments in local currencies, has reportedly gone live, nearly three years after its pilot launch in West Africa.
Formerly called Intra-Africa Trade Platform, PAPSS apparently supports the processing, settling, and clearing of intra-African trade and commerce payments through a multilateral net settlement system.
It is worth noting that cross-border payments in the continent typically involve a third currency like the US dollar or euro, which leads to high costs as well as long transaction times. To that effect, the platform enables instant, cross-border payments in local currencies in the domestic markets, making transactions simpler and lowering reliance on hard currency.
PAPSS has been developed by Afreximbank, the pan-African multilateral bank, which is also serving as the primary settlement agent in partnership with other participating African central banks, according to reports. The infrastructure’s implementation would supposedly occur in collaboration with the African Continental Free Trade Area (AfCFTA) secretariat, with endorsement from the African Union, claim reliable sources.
Afreximbank stated that the complete implementation of the new platform is expected to help the continent save more than $5 billion in payment transaction costs annually, along with underpinning the intra-regional trade growth that AfCFTA has envisioned.
Wamkele Mene, AfCFTA’s secretary general, said that implementing the agreement for establishing AfCFTA would improve intra-Africa trade and would necessitate the deployment of a payment system to allow efficient and affordable cross-border trade transactions, reports suggest.
Mene further added that the launch of PAPSS enhances the continent’s capacity to undertake cross-border transactions while expanding the scale of latent as well as active opportunities for better intra-African trade.
PAPSS CEO Mike Ogbalu III said that the platform has been designed to be a fundamental bridge connecting the local markets to each other and helping governments, individuals, and businesses on the continent seamlessly trade with each other, as per reports.
The operational launch of the platform has seemingly followed a successful pilot phase in nations of the West African Monetary Zone, where live transactions were done instantly. Evidently, PAPSS is slated to incorporate the rest of the continent by linking with national and regional payment systems and other financial services providers.