Official launch of PAPSS to facilitate payment transactions across Africa

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The highly anticipated Pan African Payments and Settlement System (PAPSS) was officially launched in Accra, Ghana on Thursday, January 13, during a virtual event titled “Connecting payments, accelerating Africa’s trade.”

The new approach allows a customer from one African country to pay in their own currency, while a seller from another country receives payment in their own currency.

After a successful pilot project in the West African Monetary Zone (WAMZ), the payment system was launched commercially. Gambia, Gambia, Ghana, Guinea, Liberia, Nigeria and Sierra Leone make up WAMZ, a West African economic and integration organization.

Why the PAPSS is important

MSMEs in Nigeria and other emerging economies face high import and export expenses, as well as unknown transaction delays due to limited correspondent banking relationships, availability of foreign currency and rail cross-border transaction capacity.

With PAPSS, Africa has demonstrated to developing countries and emerging economies how these international transaction problems can be solved with a commercially viable modern solution.

Participants no longer need to convert local currencies into exchanged currencies thanks to the fast payments of the PAPSS platform. Overnight settlements allow central banks to reduce their holdings of international currencies.

The technology verifies compliance, legality and sanctions in real time. PAPSS has the potential to reduce transaction time to seconds, removing a major barrier to the growth of intra-African e-commerce, services and goods.

What they say

According to Prudence Sebahizi, Chief Technical Advisor at the AfCFTA Secretariat, the new method will allow a consumer or buyer to pay in their own currency while the seller receives payment in their own currency.

He pointed out that it is much easier and cheaper than converting the Kenyan shilling to the US dollar and then the US dollar to Ghanaian cedi as was done before.

This effort was applauded by Emmanuel Sesonga, business development manager at Herbmadz, a Rwandan holding company specializing in several sectors such as IT and breweries.

Sesonga said: “It is a good initiative for us who plan to access the continental market by exporting our products.

“We are also planning to open in different African countries and I hope with these kind of systems it will make doing business easier not only for us at Herbmadz but also for others in the business world.”

Mike Ogbalu III, Managing Director of PAPSS says: “The commercial launch marks an important step in seamlessly connecting African markets. This will give new impetus to businesses to scale more easily across Africa and is expected to save the continent over $5 billion in transaction costs every year.

Pamela Coke-Hamilton, Executive Director of the International Trade Centre, said: “In these uncertain times, African countries now have a commercially viable tool that can overcome a critical barrier preventing MSMEs from trading competitively. ITC prepares businesses to benefit from PAPSS, creating new opportunities for growth in cross-border e-commerce and sustainable trade.

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