Pan-African Payment System PAPSS Processes $2 Billion Monthly as Cross-Border Trade Barriers Fall

The Pan-African Payment and Settlement System (PAPSS), launched by the African Export-Import Bank (Afreximbank) in collaboration with the African Union, has reached a critical operational milestone, processing approximately $2 billion in cross-border payments monthly as of March 2026. The system, which enables instant, low-cost cross-border payments between African countries using local currencies, is emerging as the financial backbone of the African Continental Free Trade Area and represents one of the most significant infrastructure investments in African financial integration since the creation of regional central banks in the 1960s.

PAPSS was designed to address one of the most persistent obstacles to intra-African trade: the high cost and slow speed of cross-border payments. Before PAPSS, an estimated 80 percent of cross-border payments between African countries were routed through correspondent banking relationships in New York, London, or Dubai, involving currency conversions through the US dollar or euro even when both trading partners were African countries. This process typically took 3 to 5 business days and cost an average of 6.5 percent of the transaction value in fees and foreign exchange spreads.

PAPSS eliminates the need for intermediaries outside Africa by enabling direct settlement between African central banks. The system operates on a real-time gross settlement basis, reducing payment times from days to seconds and cutting transaction costs by an average of 40 percent. The system also enables payment in local currencies, reducing Africa's dependence on hard currency reserves for intra-continental trade.

As of April 2026, PAPSS has been integrated with the payment systems of 22 African central banks and connects 45 commercial banks across the continent. An additional 12 central banks are at various stages of integration, with full continental coverage expected by 2028. The system supports payments in 42 African currencies, with the remaining currencies being onboarded as their respective central banks complete the necessary technical and regulatory requirements.

Professor Benedict Oramah, president and chairman of the Board of Directors of Afreximbank, described PAPSS's growth as "exceeding our most optimistic projections." Speaking at the Afreximbank Annual Meetings in Cairo in June 2025, Oramah stated: "When we launched PAPSS, our target was to process $1 billion monthly by 2027. We have reached $2 billion monthly a year ahead of schedule. This demonstrates the enormous pent-up demand for efficient, low-cost cross-border payment infrastructure in Africa."

The adoption of PAPSS has been accelerated by partnerships with existing payment infrastructure providers. PAPSS has integrated with the West African Economic and Monetary Union's RTGS system, the East African Payment System (EAPS), the Southern African Development Community's RTGS system, and the Arab Monetary Fund's Buna payment platform. These integrations have created a network of networks that enables seamless payment routing across regional economic communities.

Banks have been the primary channel for PAPSS adoption. Ecobank Transnational Incorporated, the pan-African banking group operating in 33 African countries, has been the most aggressive adopter, routing approximately $800 million in monthly transactions through PAPSS. Standard Bank Group, Africa's largest bank by assets, routes approximately $500 million monthly. United Bank for Africa (UBA), with operations in 20 African countries, processes approximately $400 million through the system.

However, the pace of adoption among smaller banks and non-bank financial institutions has been slower than anticipated. Approximately 85 percent of PAPSS transaction volume is concentrated among 15 commercial banks, leaving hundreds of smaller banks and microfinance institutions that serve small and medium-sized enterprises underrepresented. Afreximbank has addressed this gap by developing a simplified onboarding process and providing technical assistance to smaller institutions.

The mobile money sector's integration with PAPSS represents a potentially transformative opportunity. Africa's mobile money platforms, which collectively serve over 500 million registered users, are the primary means of financial transaction for a large portion of the population. Afreximbank has signed memoranda of understanding with M-Pesa, MTN MoMo, and Airtel Money to develop APIs that will enable mobile money users to make cross-border payments through PAPSS. Pilot programs in Kenya, Tanzania, and Ghana are testing the technical architecture, with full integration expected by mid-2027.

The foreign exchange implications of PAPSS are significant. Africa currently spends an estimated $60 billion annually on foreign exchange costs associated with cross-border payments, including conversion fees, bid-ask spreads, and hedging costs. By enabling payments in local currencies and reducing the number of currency conversions required in cross-border transactions, PAPSS could save African economies $15 billion to $20 billion annually in foreign exchange costs, according to Afreximbank's estimates.

The system has also introduced a pan-African currency settlement mechanism. PAPSS operates a multilateral netting system that offsets payment flows between countries, reducing the gross volume of foreign exchange that needs to be settled. For example, if a Nigerian company owes a Ghanaian supplier $10 million and a Ghanaian company owes a Nigerian supplier $8 million, PAPSS nets these flows so that only $2 million needs to be settled across the two currencies. This netting reduces the demand for hard currency reserves by an estimated 30 to 40 percent for participating central banks.

The relationship between PAPSS and the long-debated proposal for a common African currency has been a subject of discussion. The African Union's 1991 Abuja Treaty envisioned the creation of an African Central Bank and a single African currency, a goal that has been repeatedly postponed due to macroeconomic divergences among member states. PAPSS has been described by some analysts as a "stepping stone" toward monetary integration, as it creates the payment infrastructure that a common currency would require.

Oramah has been careful to manage expectations, stating that PAPSS "does not replace or presuppose a common currency" but rather "makes the existing system of national currencies work more efficiently for cross-border trade." However, he acknowledged that the system creates "the practical foundation for deeper monetary cooperation in the future."

Challenges remain. Regulatory harmonization across 54 sovereign jurisdictions is a slow and complex process. Some central banks have been reluctant to integrate PAPSS due to concerns about capital outflows, monetary policy implications, and technical capacity. Cybersecurity risks are a growing concern as the system scales, with PAPSS processing an increasing volume of high-value transactions. Afreximbank has invested $45 million in cybersecurity infrastructure, including partnerships with global cybersecurity firms and the establishment of a dedicated Security Operations Center.

For African businesses, PAPSS represents a practical solution to a practical problem. The cost and complexity of cross-border payments have been cited as one of the top three barriers to intra-African trade in survey after survey. By reducing these barriers, PAPSS is not merely facilitating transactions -- it is enabling a fundamentally different kind of African economy, one in which trade within the continent is as easy, fast, and affordable as trade with the rest of the world. That is not just a financial infrastructure achievement. It is an economic liberation.