KCB Group in Kenya and Bank of Kigali in Rwanda have become the first banks in their respective countries to integrate the Pan-African Payment and Settlement System (PAPSS) into their operations, following their launch events, held in Kigali on 26th February and Nairobi on 27th February.
The move to integrate PAPSS, an initiative launched by the African Export-Import Bank (Afreximbank) in collaboration with the African Union Commission (AUC) and the African Continental Free Trade Area (AfCFTA) Secretariat, marks a pivotal moment in Africa’s journey towards financial integration and economic prosperity.
With PAPSS now fully operational, customers of KCB and Bank of Kigali can send and receive cross-border payments seamlessly through the banks’ mobile applications and branch networks. This innovation eliminates the need for correspondent banks outside Africa and reduces dependency on third-party currencies, making transactions faster, more cost-effective, and secure.
For Kenyan and Rwandan businesses and individuals, this means unprecedented access to broader markets and enhanced opportunities for trade and investment.
According to Mike Ogbalu III, CEO of PAPSS, this development will have a transformative impact on customers and businesses. “The customers will experience faster, more cost-effective, and secure cross-border transactions from the comfort of their banks’ mobile applications or through their branches.
Businesses can trade more freely and competitively by eliminating the need for correspondent banks outside the continent and removing dependencies on third-party currencies. This transformation is set to unlock new opportunities for trade and investment, allowing African SMEs to access broader markets and contribute to local economies,” he said.
The PAPSS network, which began its pilot phase in 2022 across the West African Monetary Zone (WAMZ), has grown exponentially, now including 15 central banks, over 150 commercial banks, and 14 switches. This expansion represents a significant stride towards connecting the entire continent, ensuring that every African citizen can benefit from seamless and cost-effective cross-border transactions.
“With only 16 per cent of Africa’s total trade occurring intra-regionally, the launch of PAPSS in Kenya and Rwanda is a significant step in unlocking the continent’s potential. We believe that this innovative financial market infrastructure will facilitate greater trade opportunities, economic growth, and financial empowerment between the Eastern African countries and the rest of Africa,” Mike Ogbalu added.
Paul Russo, CEO of KCB Group, echoed these sentiments, emphasizing the bank’s commitment to catalyzing trade and payments across Africa.
“We want to play a bigger role in catalyzing trade and payments in Africa and beyond, leveraging our digital capabilities and regional footprint. Our entry into PAPSS aligns perfectly with our strategy of supporting economic growth in Kenya and across Africa by facilitating seamless financial transactions,” he said.
On the other hand, Dr. Diane Karusisi, CEO of Bank of Kigali, highlighted the practical benefits of PAPSS for African entrepreneurs and individuals.
“This system allows people to send money quickly. For example, if someone sends Rwandan francs from Rwanda, it can reach Ghana in their local currency. The system converts the currency to meet the local requirements. Entrepreneurs in Rwanda can now receive payments instantly in Rwandan francs or USD from any member country. This service is fast, affordable, and reliable,” she said.
The launch of PAPSS in Kenya and Rwanda simplifies cross-border payments and reduces transaction costs. As a result, PAPSS is poised to boost intra-African trade, empower SMEs, and foster economic growth. As more banks and countries join the PAPSS network, the vision of a more prosperous and unified Africa becomes increasingly attainable.
