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An agreement to revolutionise the settlement of cross-border transactions across African countries has been sealed between Pan-African Payment and Settlement System (PAPSS) and five commercial banks in Africa.
The Memorandum of Understanding (MoU) was signed with Access Bank, Ecobank, KCB, Standard Bank and UBA Groups.
This partnership will leverage on the vast network of subsidiaries and representative offices across major economic centers in Africa.
It further stated that the broad collaboration between PAPSS and African commercial banks will pave the way for enhanced efficiency, transparency, and reliability in intra-African settlement.
The adoption of PAPSS’s cutting-edge settlement model will streamline operations and empower businesses by providing a secure and technologically advanced platform for cross-border transactions.
African Export-Import Bank (Afreximbank) President, Professor Benedict Oramah, said this marks a remarkable step towards the realisation of the aspirations of Africa’s foreleaders, who envisioned the creation of a payment and clearing union about six decade ago.
“It also draws us closer to domesticating cross-border payments by enabling payments for cross-border trade in African currencies while strengthening African currencies.
“By leveraging on the vast continental coverage of these African commercial banks, PAPSS will seamlessly facilitate cross-border trade and payments and boost intra-African trade and investments,” Oramah said.
He said this in a statement issued in Lusaka on Wednesday.
African Continental Free Trade Area (AfCFTA) Secretariat Secretary General, Wamkele Mene, said the introduction of the new PAPSS model for onboarding African commercial banks and signing of the the MoUs with five African commercial bank Groups signifies a bold step towards the full operationalisation of PAPSS.
Mene said this will be of benefit to African traders and Small and Medium Enterprises (SMEs) in the implementation of the AfCFTA agreement.
PAPSS Chief Executive Officer, Mike Ogbalu III, expressed enthusiasm about these collaborations, stating that “these partnerships with Access Bank Group, Ecobank Group, KCB Group, Standard Bank Group, and UBA Group mark a significant milestone in the journey toward a more integrated and efficient African banking landscape.
“By embracing PAPSS’ commercial bank settlement model, these banks are helping build a robust continental platform for fostering cross-border payments, thereby paving the way for financial inclusion and substantial continental economic development,” he said.
The partnership signifies a monumental step forward in the pursuit of seamless cross-border trade payment throughout the almost 50 countries covered by these banks.
As part of this partnership, Access Bank Group, Ecobank Group, KCB Group, Standard Bank Group, and UBA Group will collaborate closely with PAPSS to ensure seamless integration of PAPSS into their existing systems.
This collaborative effort will include opening up all their African footprints for PAPSS, facilitating settlement of transactions, encouraging the participation of Fintech in PAPSS via the banks and expanding PAPSS to all the banks’ current digital channels such as mobile app banking and e-banking.
These MOUs will be put into effect gradually in partnership with central banks in the countries where the five Group Banks operate.
Customers of the banks in Africa will be informed through the usual channels of communication as soon as the service becomes available in their countries.
PAPSS and the banks will be working towards making this service available towards year-end.
These MOUs were signed on June 19, 2023, at the opening ceremony of Afreximbank’s 30th Anniversary Celebrations and Annual meetings, which proceedings were covered by Zambia Monitor in Accra, Ghana.
The MoU was signed in the presence of Heads of State and Prime Ministers from Africa and Caribbean, Heads of continental policy and governance institutions, as well as other international institutions.
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