The Pan African Payment and Settlement System, PAPSS, is a highway connecting banks, fintechs and other players to customers across the continent. This is according to Wamkele Mene, Secretary General of the African Continental Free Trade Area. In a chat with CNBC Africa’s Akin Obakeye at the unveiling of the PAPSS COWRY platform, he describes the platform as an important infrastructure to enhance cross-border trade in Africa.
Key Points:
- PAPSS provides a digital highway for banks and fintechs to connect with consumers across Africa.
- Mene emphasizes the importance of reducing trade costs to enhance regional trade.
- The platform fosters collaboration rather than competition among financial entities.
- PAPSS aims to keep transactions within Africa’s financial ecosystem, reducing reliance on foreign currencies.
- The system is integral to achieving AfCFTA’s goal of doubling intra-African trade by 2025.
In a significant stride towards bolstering intra-African trade, the Pan African Payment and Settlement System (PAPSS) was unveiled, positioning itself as a transformative infrastructure within the African economic landscape. This ambitious platform is being heralded as a ‘highway’ for banks, fintechs, and similar entities, facilitating seamless connectivity to customers across the African continent.
Wamkele Mene, Secretary General of the African Continental Free Trade Area (AfCFTA), underscored the critical role of PAPSS during an exclusive CNBC Africa interview at the platform’s formal launch event. “I’m very pleased about this event,” stated Mene, commending the efforts of PAPSS and its CEO, Michael Balu. “It’s crucial to mobilize our banks and fintechs towards implementing PAPSS, a significant event which the AfCFTA fully supports.”
For Africa to amplify intra-continental trade, the reduction of transaction costs emerges as a vital strategy. Mene highlighted PAPSS as a pivotal instrument designed to facilitate ‘very efficient, affordable payments for trade in Africa’. This approach, according to Mene, is imperative for reducing trade costs which currently act as a barrier to greater regional trade engagement.
The collaboration amongst private sector entities to utilize this infrastructure marks a shift from competition to a more synergistic relationship. “PAPSS provides a highway for fintechs and banks, an infrastructure to connect to and withdraw from as they wish. This continental payment infrastructure advantages consumers, which is the primary goal we all share,” explained Mene.
With PAPSS, the landscape for trade is set to transform radically. The system ensures that payments made within Africa are more direct and avoid the current reliance on third-party currencies like the US dollar or Euro. This financial architecture symbolizes a step towards financial sovereignty for African trade, allowing payments to remain within the continent’s financial ecosystem.
Furthermore, the collaborative approach spearheaded by PAPSS exemplifies a harmonious blending of technology and finance, driven by both large institutions and emergent companies in the fintech space. As these institutions pivot from traditional practices to embrace new technologies, they collectively fuel a burgeoning intra-African economy.
The event symbolized not only the launch of a digital infrastructure but also the beginning of a new era for African trade. By facilitating faster, cheaper transactions, PAPSS can potentially elevate the trade ecosystem, increase competitiveness, and finance ease for African businesses.
The introduction of PAPSS aligns with the broader strategic objectives of the AfCFTA, essentially hoping to double intra-African trade by 2035. By providing the transactional backbone, PAPSS can help achieve this ambitious goal, provided banks and fintechs continue to leverage this new digital highway cooperative. This collaboration underlines the transition towards a more consolidated pan-African economy where capital flows more freely, encouraging economic growth and integration.
As the continent continues to embrace this platform, PAPSS stands to not only increase efficiency and reduce costs but also deeply entrench financial inclusion across Africa. This move might just be the catalyst needed for an economically unified Africa.
