0
0 News Ghana, Latest Updates and Breaking News of Ghana, Roger A. Agana, https://newsghana.com.gh/kcb-and-bank-of-kigali-lead-charge-for-seamless-african-trade-with-new-payment-system/
Two of East Africa’s largest financial institutions, Kenya’s KCB Group and Rwanda’s Bank of Kigali, have become pioneers in a continental push to revolutionize cross-border commerce, launching the Pan-African Payment and Settlement System (PAPSS) in their markets.
The move, finalized in late February, positions the banks as the first in their respective countries to adopt the Afreximbank-backed platform, which aims to dismantle financial barriers stifling intra-African trade.
Developed by the African Export-Import Bank (Afreximbank) in partnership with the African Union Commission and the African Continental Free Trade Area (AfCFTA) Secretariat, PAPSS allows businesses and individuals to send payments across African borders instantly and affordably, bypassing costly third-party currencies like the US dollar or euro. Customers of both banks can now access the service via mobile apps or branches, with transactions settling in local currencies—a game-changer for SMEs seeking regional expansion.
“This isn’t just about speed—it’s about sovereignty,” said PAPSS CEO Mike Ogbalu III, noting that reliance on foreign correspondent banks has long drained $5 billion annually from Africa in transaction fees. “Now, a Rwandan entrepreneur can receive payment from Ghana in francs, and a Kenyan exporter can pay a supplier in Nigeria without losing weeks or profits to exchange hurdles.”
The system’s rollout marks a critical step for the AfCFTA, which seeks to lift intra-African trade from its current 16% share—far below Europe’s 68% or Asia’s 59%. Since its 2022 pilot in West Africa, PAPSS has linked 15 central banks, 150 commercial lenders, and 14 financial switches. The East African expansion, Ogbalu stressed, could accelerate economic integration: “Imagine Rwanda’s tech startups seamlessly partnering with Kenya’s fintech hubs—this is how we build a united market.”
KCB Group CEO Paul Russo framed the move as strategic. “Africa’s future hinges on frictionless trade,” he said, highlighting KCB’s footprint across seven African nations. “By digitizing cross-border flows, we’re not just moving money—we’re moving opportunities.”
For Rwanda, where PAPSS transactions now convert local francs directly into recipients’ currencies, Bank of Kigali CEO Diane Karusisi emphasized inclusivity. “A farmer in Rubavu can receive Ugandan shillings instantly. This levels the field for small businesses,” she said, noting the system’s potential to cut transfer costs by up to 80%.
While challenges remain—including onboarding more central banks and addressing currency volatility—PAPSS represents a tangible shift toward financial self-reliance. As Africa’s trade bloc eyes $1 trillion in e-commerce by 2030, the success of this payment rails experiment could determine whether the continent finally turns its 54 economies into one powerhouse.
News Ghana, Latest Updates and Breaking News of Ghana, Roger A. Agana, https://newsghana.com.gh/kcb-and-bank-of-kigali-lead-charge-for-seamless-african-trade-with-new-payment-system/
