Kenya’s KCB Group and Rwanda’s Bank of Kigali have integrated into the Pan-African Payment and Settlement System (PAPSS), boosting intra-African trade. PAPSS eliminates the need for intermediary currencies, enhancing transaction speed and cost-effectiveness. This move is part of a broader effort to improve financial connectivity across Africa, with significant support from key banking and financial institutions.
Kenya’s KCB Group and Rwanda’s Bank of Kigali have integrated into the Pan-African Payment and Settlement System (PAPSS), marking a significant step towards enhancing intra-African trade and financial interconnection. This development is crucial as it lays the groundwork for smoother economic interactions among African nations.
PAPSS, initiated by Afreximbank, the African Union Commission (AUC), and the AfCFTA Secretariat, potentially simplifies cross-border transactions by eliminating intermediaries like third-party currencies and correspondent banks. This innovation aims to provide faster, cheaper, and more secure financial exchanges across Africa.
The Bank of Kigali officially launched PAPSS on February 26 in Kigali, followed by KCB Group’s launch on February 27 in Nairobi. Customers of both banks can now process payments across the continent through mobile applications and physical branch networks.
CEO of PAPSS, Mike Ogbalu III, expressed, “This transformation unlocks new opportunities for trade and investment, allowing African SMEs to access broader markets and contribute to local economies.” Paul Russo, CEO of KCB Group, emphasized their intent to enhance trade and payment facilitation in Africa using their digital infrastructure.
Dr. Diane Karusisi, CEO of Bank of Kigali, reassured that entrepreneurs in Rwanda can now receive instantaneous payments in local currency or USD from member countries, highlighting the system’s affordability and reliability.
Since its pilot launch in 2022, PAPSS has gained traction, connecting 15 central banks, over 150 commercial banks, and 14 payment switches. With only 16% of Africa’s trade taking place within the continent, PAPSS aims to optimize financial transactions and foster economic integration throughout Africa.
The integration of Kenya’s KCB Group and Rwanda’s Bank of Kigali into PAPSS represents a pivotal advancement in facilitating greater intra-African trade. By removing the need for third-party financial intermediaries, PAPSS offers significant benefits in terms of cost, security, and speed of transactions. As more banks join the system, economic integration within Africa is poised to improve substantially.
Original Source: techlabari.com
