—-Targets 100% African adoption in 5 years
COMFORT EKELEME, Business Editor
The Pan-African Payment and Settlement System (PAPSS) has cut cross-border payment costs by up to 95 per cent, with transaction volumes rising by over 1,000 per cent this year compared to last year.
Chief Executive Officer Mike Ogbalu III disclosed this during a media briefing in Lagos at the weekend.
He explained that the system has reduced the time required for cross-border payments in Africa from between three and five days to as low as seven seconds, representing a 99 per cent reduction in transaction time.
He also said PAPSS has set a target of achieving full coverage across African countries within the next five years as it begins the second phase of its expansion.
According to him, the next phase will focus on making the infrastructure more useful to consumers, small businesses, merchants, and technology companies, adding that banks that integrate PAPSS into their digital channels have recorded between three and four times increases in transaction volumes.
PAPSS, a centralized financial market infrastructure that allows instant, secure cross-border payments between different countries in Africa using local currencies, is currently connected to 30 African countries and expected to increase the number to about 38 countries before the end of 2026.
Ogbalu said, “People are now innovating around the user experience that ties this infrastructure to the end users. PAPSS was creating opportunities for African businesses to see the continent’s population of about 1.4 billion people as a single market.
Speaking on transaction movement, he said that PAPSS is increasingly seeing transactions move from bank branches to mobile banking, internet banking, USSD and other digital channels, stressing that the immediate target is to achieve about 80 per cent coverage, including all the continent’s major economies, while the longer-term goal is to bring all African countries onto the payment infrastructure.
He said South Africa remains the only major African economy yet to join the PAPSS infrastructure, adding that discussions with the country have been positive.
“The only big market that we do not yet have on the continent is South Africa. But we are engaging and the engagement has been positive. We have been able to address most of the issues that they have raised and we hope that soon they will join
Ogbalu disclosed that PAPSS has completed the first phase of its rollout, which focused on spreading the infrastructure across the continent and has moved into a second phase, which centred on deepening adoption and developing more services for the end users.
He also stated that the first phase involved building the payment infrastructure, connecting central banks, commercial banks, financial institutions and payment switches across Africa.
According to him, PAPSS has connected about 200 financial institutions and more than 60 switches across the continent, including 10 national switches.
On the creative sector, Ogbalu said, PAPSS sees the creative sector not just as culture and entertainment, but as a full economic ecosystem that must be deliberately supported.
He said, “We see the creative industry as value chains that can create value, employment, and actually help to boost the economies in Africa.
“We have had interviews with a few of the artists and a few people in the creative world, and we’ve listened to them.
“What we have now done is actually shaping our payment system, creating solutions to be able to support them. We are working on it from two points of view.
“We have third parties who are creating products which they are plugging into our system on our own site. We are also looking at a few solutions which are still in the pipeline,” the official said.
Also speaking, Head, Marketing and Communications for PAPSS, Papa Samba Thiongane, said the institution was collaborating with the upcoming Creative Africa Nexus (CANEX) event in Lagos in November to pilot solutions that would help African exhibitors collect payments more easily from local buyers.
“We listened to them, and we came up with a solution that will help them in that direction. And this CANEX will be the pilot, one of the first pilots for us, where we implement this solution.
“So, we are working very closely with them through our colleagues in Afreximbank at the CANEX Department,” he said.
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