Grace Ashiru
Since its launch by the African Union and the African Export-Import Bank (Afreximbank) in 2022, the Pan African Payment and Settlement System (PAPSS) has initiated a significant transformation in cross-border transaction processes, bringing more than 25 commercial banks into its network. Ecobank’s latest partnership with PAPSS will likely hasten widespread adoption across the continent.
In a public statement at the 30th Afreximbank Annual Meeting in Accra, Ghana, Ecobank Group and PAPSS disclosed their new collaboration. This strategic alliance is set to enhance cross-border transactions for Ecobank and its subsidiaries via the PAPSS platform.
Ecobank Group CEO, Jeremy Awori, sees this partnership as crucial for realizing the African Continental Free Trade Area (AfCFTA) objectives and, ultimately, for Africa’s financial consolidation and economic growth. He says, “We pledge our commitment to the success of PAPSS and look forward to lending our expertise in payments and collections across our African network of 33 markets.”
By aligning with Ecobank, PAPSS and its partner banks can extend their reach across Africa, promoting more substantial intra-African trade. Awori emphasized that this collaboration signifies a significant step towards overcoming barriers to swift and efficient payments and collections in African currencies.
So, what exactly is PAPSS, and why is it a game-changer?
PAPSS is a centralized pan-African payment system facilitating instantaneous cross-border payments in local African currencies. It connects central banks, commercial banks, and other African financial institutions.
Launched by Afreximbank and the African Union in January 2022, PAPSS was initially presented as a means to reduce the cost and duration of cross-border payments in Africa, thereby bolstering intra-African trade. Since its inception, PAPSS has already joined forces with over 25 commercial banks, working as a real-time gross settlement system to expedite payment processes.
Moreover, PAPSS enhances transactional security compared to the existing correspondent banking system, thanks to its centralized platform overseen by the African Union and Afreximbank. One of PAPSS’s innovative introductions is the Commercial Bank Settlement Model, which allows commercial banks to manage their liquidity in line with their banking requirements by opening and funding their settlement accounts at Afreximbank.
The benefits to Ecobank
Ecobank’s extensive network of 33 subsidiaries across Africa, along with its numerous collaborations with banks in other countries, will significantly benefit from the partnership. The intention is to facilitate traders across continents to send and receive payments instantly through the Ecobank network.
PAPSS CEO, Mike Ogbalu III, hailed the agreement with Ecobank Group, saying, “Having the backing of Ecobank Group, one of Africa’s leading banks, is an honor. Moreover, it indicates that PAPSS is the payment system set to revolutionize how Africans conduct cross-border transactions. I am grateful for the faith that the bank’s management has placed in PAPSS.”
2023 has been a productive year for Ecobank
In addition to the PAPSS collaboration, Ecobank has forged another significant partnership this year with the Fingo App, a neobank platform. Accessible via Ecobank’s African network, the Fingo app provides users with free fund transfers and various features, including utility payments. Since its inception in 2021, the Fingo app has been approved by the Central Bank of Kenya (CBK) and has raised over $4 million across two funding rounds. While it
Claims to be Kenya’s first digital bank, the NCBA Loop, introduced by NCBA in 2017, disputes this claim. Other digital lenders, such as Branch, join Kenya’s neo-banking competition.
