PAPSS Aims to Transform Intra-African Payments Amid Regulatory Landscape

The Pan-African Payment and Settlement System (PAPSS) is poised to reshape how businesses move money across Africa, offering a solution to high costs and slow transaction times that have long hampered intra-continental trade. Launched in 2022 by Afreximbank in partnership with the African Union and AfCFTA, PAPSS currently connects 30 countries, enabling settlements in seconds rather than days.

Early results show promise: cross-border payments now average just seven seconds (meeting a 120-second guarantee), costs have been slashed by up to 95%, and transaction volumes have surged over the past year. By eliminating reliance on dollar or euro intermediaries, PAPSS enables direct currency conversions between African nations.

The system’s efficiency stems from its multilateral net settlement model - instead of settling each transaction individually, only the net difference is moved between countries. As CEO Mike Ogbalu III explained at a recent briefing in Lagos, if $10 million flows into Ghana while $9 million returns, “only the $1 million equivalent changes hands.”

Beyond basic payments, PAPSS has introduced additional tools like the Pan-African Currency Marketplace (PACM) which facilitates direct currency exchanges between African markets. This addresses a key challenge: intra-African trade represents just 14% of Africa’s total commerce while remittance costs remain among the highest globally.

However, realizing PAPSS’ full potential requires navigating regulatory landscapes and deepening adoption beyond early adopters like Ghana and Nigeria - where central bank support has accelerated integration. The next phase will focus on making these capabilities accessible to businesses and consumers across the continent.