GCB Bank Plc, one of the largest banks in Ghana, completed the first Pan-African Payment and Settlement System (PAPSS) client transaction in Ghana. The transaction involved a Ghanaian incorporated entity initiating a supplier payment from GCB in Ghana Cedis to a beneficiary in Nigeria who received the payment in Naira instantly. This innovation revolutionalizes how Ghanaian individuals and businesses trade with the rest of Africa.
Launched in 2022, The PAPSS is a centralized financial market infrastructure enabling efficient and secure money flow across African borders. PAPSS is an African Union infrastructure developed with the African Export-Import Bank (Afreximbank) to complement trading under the African Continental Free Trade Area. PAPSS collaborates with central banks on the continent to provide a payment and settlement service to which commercial banks, payment service providers and fintechs can connect as participants.
The platform offers an alternative to the current high-cost and lengthy correspondent banking relationships through a simple, low-cost risk-controlled payment clearing and settlement system. It also serves as an avenue of expanding financial inclusion to cover the informal sector while monitoring funds transfers, thus reducing money laundering, which costs the continent several billions of dollars annually.
As of June 2022, the PAPSS network consists of 8 central banks, 28 commercial banks and six switches. It will expand into the five regions of Africa before the end of 2023. All Central banks are to sign up by 2024, and all commercial banks by the end of 2025.
Source: GCB
