The Pan-African Payment and Settlement System (PAPSS) has signed a memorandum of understanding (MOU) with five African multinational commercial banking groups for seamless cross-border trade payments.
The banks include Access Bank Group, Ecobank Group, KCB Group, Standard Bank Group, and UBA Group. The partnership is aimed at revolutionising cross-border transactions, leveraging the vast network of subsidiaries and representative offices in major economic centres across Africa.
These MOUs were signed on June 2023, at the opening ceremony of Afreximbank’s 30th anniversary celebrations and annual meetings held in Accra, Ghana. Present at the sealing of the deal were heads of state and prime ministers from Africa and the Caribbean, heads of continental policy and governance institutions as well as international institutions.
The MoUs signify a monumental step forward in the pursuit of seamless cross-border trade payments in almost 40 countries covered by these banking groups. The broad collaboration between PAPSS and the 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.
As part of this partnership, Access Bank, Ecobank, KCB Group, Standard Bank, and UBA Group will collaborate with PAPSS to ensure a 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.
Commenting on the development, Benedict Oramah, president of Afreximbank, said: “the signature of these MoUs marks a remarkable step towards the realisation of the aspirations of Africa’s fore leaders, who envisioned the creation of a payment and clearing union about six decades 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”.
Also, Wamkele Mene, secretary-general of the AfCFTA, said: “the introduction of the new PAPSS model for onboarding African commercial banks and the signing of the MoUs with the five African commercial bank groups signifies a bold step towards the full operationalisation of PAPSS for the benefit of African traders and SMEs in the implementation of the AfCFTA agreement.”
Mike Ogbalu III, the chief executive officer at PAPSS, expressed enthusiasm about the 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 to build a robust continental platform for fostering cross-border payments, thereby paving the way for financial inclusion and substantial continental economic development.”
These MOUs will be put into effect gradually in partnership with central banks in the countries where the five banking groups operate.