Since its inauguration by the African Union and Afreximbank in 2022, the Pan African Payment and Settlement System (PAPPS), which was designed to facilitate smooth cross-border transactions, has added over 25 commercial banks to its network. Adoption might be made much simpler by the collaboration with Ecobank.
Through their relationship, Ecobank Group and the Pan African Payment and Settlement System (PAPSS) will facilitate cross-border transactions for the bank and its subsidiaries via PAPSS. At the 30th Afreximbank Annual Meeting in Accra, Ghana, the partnership was revealed.
For Ecobank Group CEO Jeremy Awori, “Partnerships such as the one we have signed on PAPSS are essential for the delivery and success of the AfCFTA and for our continent’s financial integration and economic development. We are committed to the success of PAPSS and are pleased to bring on board our payments and collections expertise from our African coverage of 33 markets.”
“This partnership ensures that all partner banks and PAPSS can expand their reach rapidly and enable greater and wider intra-African trade. Today, we begin to change and rewrite the narrative of low intra-African trade by removing the barrier to efficient and instant payments and collections in African currencies,” Awori added.
What is PAPSS, and why is it important?
Instantaneous cross-border payments in local African currencies are made possible with the pan-African payment system PAPSS. Central banks, commercial banks, and other financial institutions around the continent are connected by this centralized platform.
The African Union (AU) and the African Export-Import Bank (Afreximbank) introduced the platform in January 2022. It was marketed at inception as a system that could speed up intra-African trade and lower the cost and duration of cross-border payments in Africa. Since its inception, it has collaborated with more than 25 commercial banks and, as a real-time gross settlement system, helps speed up payment processing.
Because the new system runs on a centralized platform under the supervision of Afreximbank and the African Union, it also offers increased security over the existing correspondent banking system.
Commercial banks can open and fund their settlement accounts at Afreximbank and manage their liquidity in accordance with their banking needs thanks to a new settlement model that PAPSS introduced at launch dubbed the Commercial Bank Settlement Model.
The Ecobank Angle
With numerous relationships with individual banks in various nations, Ecobank maintains a network of 33 subsidiaries throughout the continent. The partnership's ultimate goal is to enable instantaneous payment receiving and sending via the Ecobank network for dealers located on different continents.
In addition to being a great honor, Ecobank Group's participation demonstrates that PAPSS is the payment system that will revolutionize the way that people in Africa conduct cross-border transactions. In light of this, I value the bank's management's confidence in PAPSS," PAPSS CEO Mike Ogbalu III stated.
Ecobank and the neobanking platform Fingo App teamed earlier in May. Users throughout Africa can use the digital bank through Ecobank's network and send money to one another for free. Other features like utility payments are included. Since its 2021 launch, Fingo has raised over $4 million in two rounds of funding and been granted a license by the Central Bank of Kenya (CBK). It is untrue to say that it was Kenya's first digital bank because NCBA introduced NCBA Loop in 2017. Since then, digital lender Branch has also entered the nation's neobanking competition.
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