Excitement across Africa as transactions goes live on PAPSS

GCB Bank Plc, one of the largest banks in Ghana, announced it successfully completed the first Pan-African Payment and Settlement System (PAPSS) client transaction in Ghana.?

The first PAPSS client deal saw a Ghanaian entity initiate a supplier payment from GCB bank in Ghana Cedis to a beneficiary in Nigeria who received the payment in Naira instantly.?

A brain brainchild of Afreximbank and proudly supported by the African Union African Continental Free Trade Area (AfCFTA) Secretariat, PAPSS is a Pan-African Payment & Settlement infrastructure that enables instant payments across African borders in local currency!

There are over 42 currencies in Africa, the new PAPSS approach allows a customer in one African country to pay in their own currency, while a seller in another country receives payment in their own currency.

With PAPSS, Africans will no longer need to convert local currencies into hard currencies which then entailed the funds leaving Africa to be converted before being sent back again to the beneficiary bank – adding days to the transaction time

More than that, horrible experiences like, " I paid an extra $165 ( $30 as transfer fee, $35 as SWIFT charges and another $100 bank charges ) on top of a $10,000 bank transfer to the seller on orders within Africa is over.?

According to Benedict Oramah, President of the African Export-Import Bank, (Afreximbank), in a recent interview with Africa Renewal, ‘’a cumbersome and time-consuming process costs us [Africans] about $5 billion in [money transfer] charges each year.” Worst still, is the fact that included in this whopping sum are would-be -profits accruable to African Businesses, SMEs & Entrepreneurs, but are filtering away through Bank Charges, Exchange Rates & Transfer Fees amongst others.

How PAPSS works

Sending money using the PAPSS is a five-step process:?

1.) The first step is when an individual issues a payment instruction to their local bank or payment service provider.?

2.) Second, the bank or the payment service provider sends the instructions to PAPSS.?

3.) Third, PAPSS validates the payment instruction.??

4.) Fourth, upon successful validation, PAPSS will forward the instruction to the beneficiary’s bank or payment service provider.?

5.) Lastly, the bank or payment service provide pays the transferred funds, in local currency, to the beneficiary.?

Officially launched on 13 January in Accra, Ghana, by Afreximbank and AfCFTA Secretariat, the Pan-African Payment and Settlement System (PAPSS), aground-breaking platform will save Africa more than US$5 billion annually in payment transaction costs, while it plays an increasingly significant role in accelerating the continent’s transactions underpinning the operationalization of the AfCFTA.

In announcing the rollout, Afreximbank says that by “simplifying cross-border transactions and reducing the dependency on hard currencies for these transactions, PAPSS is set to boost intra-African trade significantly beside leading to increase in value addition to products, jobs creation and more earnings for traders.

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