The Pan African Payment and Settlement System (PAPPS), which was launched to make cross-border transactions seamless, has since onboarded over 25 commercial banks on its system since its launch by the African Union and the Afreximbank in 2022. The partnership with Ecobank could make adoption even easier.
Ecobank Group and the Pan African Payment and Settlement System (PAPSS) have announced a partnership that will support cross-border transactions of the bank and its subsidiaries through PAPSS. The collaboration was announced at the 30th Afreximbank Annual Meeting in Accra, Ghana.
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?
PAPSS is a pan-African payment system facilitating instant cross-border payments in local African currencies. It is a centralised platform that connects central banks, commercial banks, and other financial institutions across the continent.
The platform was launched in January 2022 by the African Export-Import Bank (Afreximbank) and the African Union (AU). At launch, it was sold as a system that could reduce the cost and time of cross-border payments in Africa and boost intra-African trade. It has partnered with over 25 commercial banks since its launch and helps accelerates payment processing as a real-time gross settlement system.
The system also boosts security compared to the current correspondent banking system, as it operates on a centralised platform governed by the AU and Afreximbank.
At launch, PAPSS introduced a new settlement model called the Commercial Bank Settlement Model, which allows commercial banks to open and fund their settlement accounts at Afreximbank and manage their liquidity as per their banking requirements.
The Ecobank angle
Ecobank has a 33-subsidiary network on the continent, with several partnerships with individual banks in other countries. To this end, the partnership aims to allow traders from across continents to receive and send payments through the Ecobank network instantly.
“Having the cooperation of Ecobank Group, one of the major banks in Africa, is a huge honour, but more importantly, it shows that PAPSS is the payment system that will transform the way that people in Africa conduct cross-border transactions. To this end, I appreciate the bank’s management for having faith in PAPSS,” said PAPSS CEO, Mike Ogbalu III.
Not Ecobank’s first product in 2023
Earlier in May, Ecobank partnered with neobank platform Fingo App. The digital bank, accessed in Ecobank’s network in Africa, allows users to send funds to each other for free. It includes other features, such as utility payments. Fingo, launched in 2021, has since been licensed by the Central Bank of Kenya (CBK) and raised over $4 million in two rounds. It claims to be Kenya’s first digital bank, but that is inaccurate since NCBA launched NCBA Loop in 2017. Digital lender Branch has since joined the neobanking race in the country too.