Africa’s drive to simplify cross-border trade is gaining traction as Pan African Payment and Settlement System (PAPSS) announces a near-record surge in transactions and spans dozens of African countries.
The financial infrastructure layer for the African Continental Free Trade Area enables business and individuals to make transactions denominated in local African currencies.
Transactions in the PAPSS Infrastructure Surge
The number of transactions processed by the PAPS infrastructure has jumped 1000% while the value of transactions has grown by around 120%.
With over 30 countries and more than 200 banks and fintech firms in the network, the system spans most African nations.
The initiative aims to make payments between African countries more efficient by bypassing the use of foreign currencies and correspondent banks.
Facilitating African Free Trade Area Transactions
The PAPSS is set to become an important element in facilitating AfCFTA transactions.
By allowing customers to send payments in their local currency and receive them in the same currency, the system aims to cut costs and processing time.
For manufacturers, small-scale enterprises, farmers and transporters, the PAPSS infrastructure will contribute to a quicker checkout process.
Opening of Central Africa to PAPSS
The newly recruited Bank of Central African States (BEAC) is expected to bring business from the Central African region into the PAPSS system.
The addition of BEAC will allow businesses in the region to quickly connect with commercial outlets in other African countries.
However, the new level of transactions also requires enhanced regulatory oversight to ensure that money laundering risks are kept at bay.
For the continental single market plan, the PAPSS infrastructure is an enabler that will make the continental free trade area a reality.
