[WATCH] The Pan-African Payment Settlement System Launches with Approval from the African Union

According to AfriEximBank and AfCFTA Secretariat, PAPPS is a financial market infrastructure to enable instant, cross-border payments in local currencies between African markets.

0
582
JOIN US ON TELEGRAM

The much awaited Pan-African Payment Settlement System (PAPSS) in now live after a launch ceremony in Ghana that was attended by top African dignitaries, including Vice President, Mahamadu Bawumia of Ghana.

According to AfreximBank and AfCFTA Secretariat, PAPPS is a financial market infrastructure to enable instant, cross-border payments in local currencies between African markets.

PAPSS eases the settlement process among banks, i.e the process through which a transaction from entity x reaches entity y.

What is the Problem?

Micro, small and medium-sized enterprises (MSMEs) in low and middle-income countries suffer from high import and export costs and uncertain transaction delays caused by limited cross-border relations between banks, foreign currency availability, and cross-border transaction rail capacity.

Until now, payments and documentation needed to go from a buyer’s bank through at least two ‘traded currency’ intermediary ‘correspondent banks’ to reach another supplier’s bank.

This is a significant pain point that has been exploited by fintechs across the continent to provide cross-border funds transfers.

Checks on transactions that take minutes or hours between strong, fully automated economies can take many days and cost a business in a low or middle-income country more than 10% of a transaction’s value. Central banks in these countries tie up millions in precious international currency reserves to settle large and small trade transactions.

___________________________________________________________________

SEE ALSO4 Out of the 9 Countries with a Total Ban on Cryptocurrencies are in North Africa

___________________________________________________________________

How PAPSS Solves this

With instant payments through the PAPSS platform, participating banks no longer need to convert local currencies into traded currencies, usually led by the dollar.

  • Central Banks can engage in overnight settlements reducing international currency holdings 
  • Compliance, legal, and sanctions checks are performed instantly by the system
  • PAPSS has the potential to cut transaction times to seconds, removing a huge barrier to the growth of intra-African e-commerce, services, and products trade.

According to Mike Ogbali III, CEO, PAPSS:

The commercial launch marks a significant milestone in connecting African markets seamlessly. It will provide a fresh impetus for businesses to scale more easily across Africa and is likely to save the continent more than $5 billion in transactions costs every year.

– CEO, PAPSS

Speaking at the monumental launch, Benedict Oramah, Chairman and President of AfreximBank said:

“We are eager to build upon the African Continental Free Trade Area’s creation of a single market throughout Africa, and PAPSS provides the state-of-the-art financial market infrastructure connecting African markets to each other thereby enabling instant cross-border payments in respective local African currencies for cross-border trade”

– President, AfreximBank

The system is expected to play an important role in:

  • Accelerating inter-African trade
  • Improving the competitiveness of small businesses
  • Realizing the objectives of the African Continental Free Trade Area (AfCFTA)

The platform has been developed by AfreximBank, which also acts as the main Settlement Agent in partnership with participating African Central banks.

The implementation of the infrastructure is taking place in collaboration with the African Continental Free Trade Area (AfCFTA) Secretariat with the endorsement of the African Union (AU).

____________________________________________________________________

RECOMMENDED READING: ‘I am Confident that One Day, the African Continent will have a Single Currency,’ Says Secretary General, AfCFTA

____________________________________________________________________

Thank you for your support by helping us create content:

BTC address: 3CW75kjLYu7WpELdaqTv722vbobUswVtxT

ERC20 Address: 0xBc11cFa590C6CC465248D77d399C3106B881cC0E

SOL address: 9cC65AWFHj848kntcoyiT8av3jiRQEqyTTmBR1GvVUb

____________________________________________________________________

Follow us on Twitter for latest posts and updates

Join and interact with our Telegram community

_____________________

Subscribe to the channel below to keep updated on latest news on video:

____________________________________________________________

LEAVE A REPLY

Please enter your comment!
Please enter your name here