Africa’s first continent-wide digital system to facilitate payments for goods and services in local currencies has officially gone live, three years after the launch of a pilot in West Africa.

The Pan-African Payment and Settlement System (PAPSS), formerly referred to as the Intra-Africa Trade Platform, enables the processing, clearing and settling of intra-African trade and commerce payments, leveraging a multilateral net settlement system.

Cross-border payments in Africa typically involve a third currency, such as the US dollar or euro, leading to high costs and long transaction times.

The platform addresses this issue by enabling instant, cross-border payments in local currencies between African markets, thereby simplifying transactions and reducing dependency on hard currency. According to Afreximbank, its full implementation is expected to save the continent more than US$5bn in payment transaction costs each year, as well as underpin the growth in intra-regional trade envisaged by the African Continental Free Trade Area (AfCFTA).

Welcoming the development, Wamkele Mene, AfCFTA secretary general, says: “The implementation of the agreement establishing the AfCFTA will improve intra-Africa trade, necessitating in this regard the establishment of a payment system to facilitate affordable and efficient cross-border trade transactions. The introduction of PAPSS provides Africa with greater capacity to conduct cross-border transactions and expand the scale of both active and latent opportunities for enhanced intra-African trade.”

“PAPSS is designed to be a fundamental rail connecting African markets to each other and enabling individuals, businesses and governments on the continent to trade with each other seamlessly,” adds Mike Ogbalu III, CEO of PAPSS. “PAPSS will provide fresh impetus for businesses to scale more easily across Africa, essentially eliminating the borders that have balkanised us and robbed us of our economic prosperity for so long.”

The platform has been developed by Afreximbank, which is also acting as the main settlement agent in partnership with participating African central banks. The implementation of the infrastructure is taking place in collaboration with the AfCFTA secretariat, with the endorsement of the African Union .

The operational launch of PAPSS follows a successful pilot phase in the countries of the West African Monetary Zone, with live transactions done in an instant. The plan now is to integrate the rest of the continent into PAPPS by linking it to national payment systems, regional payment systems and other financial services providers.