KCB Group in Kenya and Bank of Kigali in Rwanda have launched the Pan-African Payment and Settlement System (PAPSS). This marks a major step toward financial integration in Africa. The two banks are the first in their countries to adopt the system.
PAPSS was developed by Afreximbank in partnership with the African Union Commission and AfCFTA. The system allows faster, cost-effective, and secure cross-border payments across Africa. The launch took place in Kigali on February 26 and in Nairobi on February 27.
Customers of KCB and Bank of Kigali can now send and receive payments seamlessly. The service is available on mobile apps and bank branches. Businesses and individuals can transfer money without using correspondent banks or third-party currencies.
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Transforming Cross-Border Transactions in Africa
Mike Ogbalu III, CEO of PAPSS, highlighted the benefits of the system. “The customers will experience faster, more cost-effective, and secure cross-border transactions from the comfort of their banks’ mobile applications or through their branches.
“Businesses can trade more freely and competitively by eliminating the need for correspondent banks outside the continent and removing dependencies on third-party currencies. This transformation is set to unlock new opportunities for trade and investment, allowing African SMEs to access broader markets and contribute to local economies.”
The PAPSS network started in 2022 in West Africa with six countries. Now, it includes 15 central banks, 150 commercial banks, and 14 financial switches. Mr. Ogbalu III called the expansion into Kenya and Rwanda a big step toward connecting all African nations.
“With only 16 per cent of Africa’s total trade occurring intra-regionally, the launch of PAPSS in Kenya and Rwanda is a significant step in unlocking the continent’s potential,” he said. “We believe that this innovative financial market infrastructure will facilitate greater trade opportunities, economic growth, and financial empowerment between the Eastern African countries and the rest of Africa.”
Banks Commit to Boosting Intra-African Trade
Paul Russo, CEO of KCB Group, expressed his excitement about joining PAPSS. He emphasized KCB’s role in promoting trade and economic growth in Africa. “We want to play a bigger role in catalyzing trade and payments in Africa and beyond, leveraging our digital capabilities and regional footprint. Our entry into PAPSS aligns perfectly with our strategy of supporting economic growth in Kenya and across Africa by facilitating seamless financial transactions.”
Dr. Diane Karusisi, CEO of Bank of Kigali, spoke about the system’s advantages. “This system allows people to send money quickly. For example, if someone sends Rwandan francs from Rwanda, it can reach Ghana in their local currency. The system converts the currency to meet the local requirements. Entrepreneurs in Rwanda can now receive payments instantly in Rwandan francs or USD from any member country. This service is fast, affordable, and reliable.”
Mr. Ogbalu III praised KCB and Bank of Kigali for their leadership in adopting PAPSS. He urged other banks in East Africa to join the system. He emphasized the need for financial institutions to support AfCFTA’s vision of a united and prosperous Africa.
The launch of PAPSS is expected to reduce costs and enhance the efficiency of cross-border transactions. The initiative will benefit businesses, entrepreneurs, and individuals across Africa. With more banks expected to join, Africa is moving closer to financial unity.