KCB Group Partners with PAPSS to Transform Cross-Border Payments in Africa

Editorial Desk
By Editorial Desk 3 Min Read

In a major leap towards revolutionizing the financial landscape in Africa, KCB Group has signed an exclusive deal with the Pan-African Payment and Settlement System (PAPSS).

With this historic agreement, KCB becomes the first bank in East Africa to join the continent-wide financial market infrastructure, paving the way for secure and efficient cross-border transactions.

The agreement, signed during the Afrexim Bank Annual Meeting in Accra, Ghana, promises to bring about significant improvements in speed, affordability, and reliability of transactions. Intra-African trade will be boosted, opening up vast economic opportunities for customers of KCB Group.

KCB Group CEO, Paul Russo, expressed his confidence in the platform, saying, “With this agreement, we bring onboard our unparalleled expertise in payments and collections accumulated over 120 years. Our customers will now have access to a seamless and efficient channel for Intra-African trade payments, benefiting from multiple advantages and efficiencies.”

The centralized Financial Market Infrastructure, which has been developed in collaboration with the African Export-Import Bank (Afreximbank), serves as a game-changer for trade under the Africa Continental Free Trade Area (AfCFTA). The system aims to replace the current high-cost and time-consuming correspondent banking relationships with a low-cost, risk-controlled payment clearing and settlement system, promoting trade and economic activities among African countries.

“As a Pan-African banking institution, we are committed to facilitating and promoting trade across Africa and beyond,” Russo stated. “Through partnerships like these, we will be able to settle our own transactions, as well as those of our subsidiaries and other commercial banks, with ease and efficiency, removing unnecessary hurdles.”

The PAPSS network currently includes 8 Central Banks, 28 commercial banks, and six switches, with successful pilots run in the six countries of the West African Monetary Zone. Expansion into the five regions of Africa is expected to be completed before the end of 2023. By the end of 2024, all African Central Banks are expected to be on board, followed by all commercial banks by the end of 2025.

The benefits of the platform for intra-African trade payments are numerous. These include a reduction in the time variability of cross-border payments, support for real-time payments, decreased liquidity requirements for commercial banks, removal of transaction value limits, the ability for commercial banks to set exchange rates, and strengthened oversight of cross-border payment systems by Central Banks.

With this groundbreaking partnership, KCB Group is setting a new benchmark in the realm of cross-border payments in Africa. As the financial landscape in the continent evolves, KCB is firmly positioned to lead the way towards a more seamless, efficient, and inclusive financial ecosystem.

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