CBK Backs PAPSS as Africa Builds a Homegrown Payment Network

Kenya has joined a broader African effort to make cross-border payments cheaper and faster through the Pan-African Payment and Settlement System (PAPSS), a platform that allows businesses to settle transactions in local currencies rather than routing payments through banks outside the continent.

The initiative, backed by the Central Bank of Kenya (CBK), aims to remove one of the biggest financial hurdles facing trade under the African Continental Free Trade Area (AfCFTA). Wider adoption of PAPSS could save African economies more than $5 billion (about KSh646 billion) each year, according to figures shared during the Montran Africa Market Infrastructure Summit.

Developed by Afreximbank in partnership with the African Union and the AfCFTA Secretariat, PAPSS has moved beyond the planning stage. The network now connects 28 African countries, bringing together more than 190 commercial banks and fintech companies through 16 payment switches, with participating institutions also able to reach more than 250 additional financial institutions through partner networks. Earlier this month, the Bank of Central African States (BEAC) became the latest regional central bank to join the system, extending its reach into the six-country Central African Economic and Monetary Community (CEMAC).

Cross-border payments within Africa often follow an indirect path. A Kenyan business paying a supplier in Ghana or Nigeria may first convert shillings into US dollars through correspondent banks before the funds reach the final destination.

Each conversion adds costs, extends settlement times and exposes businesses to foreign exchange fluctuations.

PAPSS is designed to simplify that process. Participating financial institutions can settle transactions directly in local currencies while the system manages the underlying settlement between central banks. The result is a payment process that is faster, less expensive and less dependent on financial institutions outside Africa.

Beyond lowering costs, the platform also supports Africa’s ambition to process more regional payments within the continent instead of relying on overseas correspondent banking networks. The system is expected to support AfCFTA by making it easier for businesses to buy and sell goods across borders without the payment delays that have long complicated regional trade.

Delegates at the Montran Africa Market Infrastructure Summit said fragmented payment infrastructure remains one of the biggest barriers to intra-African commerce.

Many African payment systems were built to serve domestic markets rather than regional trade. As a result, transactions often pass through multiple banks before reaching their destination, with every intermediary adding fees and processing time.

Montran Africa Regional Executive Director Wohoro Ndohho said African markets need payment infrastructure built around interoperability, inclusion and the realities of doing business across the continent.

Industry projections presented at the summit estimate that Africa’s cross-border payment volumes could grow from about $329 billion today to nearly $1 trillion by 2035, driven by regional trade, digital commerce and broader financial inclusion.

For Kenya, lower payment costs could improve the competitiveness of exporters, manufacturers and businesses serving customers across Africa.

Banks and fintech firms could also benefit from payment infrastructure that settles transactions more efficiently, reducing operational costs while expanding payment services beyond national borders. Businesses stand to gain from lower transaction costs and easier access to regional markets, while consumers could benefit from more affordable cross-border money transfers as adoption grows.

The move complements Kenya’s broader efforts to modernise its financial infrastructure while supporting regional economic integration. Faster settlement could also help businesses manage cash flow more effectively by reducing the time it takes for funds to arrive from other African markets.

Technology alone will not deliver a continent-wide payment network.

Central banks, regulators, commercial banks and payment providers will need to align technical standards, strengthen regulatory cooperation and expand participation across financial institutions.

Among the priorities discussed at the summit were wider adoption of the ISO 20022 financial messaging standard, modern real-time gross settlement (RTGS) systems and stronger regional payment networks capable of processing transactions securely and at scale.

The discussions also highlighted closer links between payment systems, mobile money platforms and capital markets, opening the door to broader financial access and smoother movement of money across African economies.

For Kenya, participation in those efforts could strengthen its position as one of East Africa’s financial hubs while giving businesses another tool to trade more efficiently across the continent.

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