PAPSS: Africa Builds Its Own Cross-Border Payment Rail

For decades, a payment from a business in Accra to a supplier in Lagos rarely travelled directly between Ghana and Nigeria. It typically left the continent: cedis were converted into US dollars, routed through correspondent banks in New York or London, converted again into naira, and only then credited to the supplier — days later, with fees and foreign-exchange spreads deducted at every step. Africa's own trade has been paying a toll to payment rails outside Africa.

The Pan-African Payment and Settlement System (PAPSS) is the continent's answer. It is one of the clearest examples of a broader global trend: regions building their own payment infrastructure instead of defaulting to the correspondent-banking networks that have dominated cross-border payments for half a century.

What PAPSS is

PAPSS was first announced by the African Export-Import Bank (Afreximbank) and the African Union at the AU summit in Niamey in July 2019, and officially launched in Accra on 13 January 2022. It was developed by Afreximbank together with the African Union and the secretariat of the African Continental Free Trade Area (AfCFTA), and the AU has adopted it as the payment and settlement platform for the AfCFTA.

The ambition is simple to state: a payer in one African country pays in their local currency, the beneficiary in another African country receives their local currency, and the transaction does not need to pass through a third currency or a foreign correspondent bank to get there.

How it works

PAPSS is a financial market infrastructure that sits between national payment systems. Its design, as described by PAPSS itself, rests on four elements:

• Participants. Direct participants — typically commercial banks — connect to PAPSS and fund a PAPSS clearing account from their settlement account at their central bank's real-time gross settlement (RTGS) system. Indirect participants, such as payment service providers without an RTGS account, connect through a sponsoring direct participant.
• Instant payment. The sending bank or PSP submits a payment instruction in its local currency. PAPSS validates it — including compliance and sanctions screening — and forwards it to the receiving bank, which credits the beneficiary in their local currency. PAPSS states that payments are processed within 120 seconds, around the clock, every day of the year, using ISO 20022 messaging.
• Pre-funding. Because credits are instant and irrevocable, PAPSS checks that the sending participant has funds in place before a payment is released.
• Net settlement. Once a day (currently at 11:00 UTC), PAPSS calculates each participating central bank's net position across all transactions and settles it — in local currency through the central banks' RTGS accounts, with the corresponding hard-currency positions settled through accounts held at Afreximbank.

The last point is the key to the whole model. Under correspondent banking, every individual transaction requires its own foreign-exchange conversion. Under PAPSS, thousands of payments in both directions between two countries offset each other during the day, and only the remaining net difference has to be settled in hard currency. PAPSS estimates that this can reduce the foreign-exchange requirement by up to 80%.

Alongside the instant payment system, PAPSS has added the PAPSS African Currency Marketplace (PACM), which facilitates trading between African currencies directly, and PAPSSCARD, a pan-African card product. Optional overlay services include request-to-pay, escrow, proxy addressing and low-cost intra-African remittances.

Where PAPSS stands in 2026

Adoption was slow in the first years — building a network of central banks, commercial banks and switches across dozens of jurisdictions takes time, and most of the effort went into connectivity rather than volume. 2026 looks like the turning point. At a media briefing in Lagos in September 2026, PAPSS reported:

• operations in more than 30 African countries across all five regions of the continent, with about ten countries joining in 2026 alone;
• 24 national and regional central banks, more than 200 commercial banks and payment service providers, and 16 national switches connected, with a reach of over 300 financial institutions through partnerships;
• transaction volumes up roughly 1,000% and values up roughly 120% compared with the same period of 2025, with Nigeria among the main contributors.

Two recent additions illustrate the momentum. The Bank of Algeria joined in August 2025, and in July 2026 the Bank of Central African States (BEAC) — the central bank of the six CEMAC countries — became a member, with CEMAC banks expected to connect by the end of 2026. Egypt is preparing its rollout as well.

PAPSS's own figures for the end-user benefit are striking: it cites cost savings of 92–95% per transaction and a 99.99% reduction in processing time compared with traditional correspondent routes. These are the operator's own estimates and will vary by corridor, but the direction is clear. PAPSS's CEO Mike Ogbalu III described the first phase as "about building, connecting and establishing trust"; the next phase, from 2027, is meant to be about adoption and transaction growth.

What still stands in the way

Connecting central banks is the hard infrastructure work; getting businesses and consumers to actually route payments through PAPSS is a different challenge.

• Front-end adoption. A bank being "connected" does not mean its corporate clients see PAPSS as an option in their online banking, or that it is priced attractively. Usage depends on banks productising the rail.
• Currency liquidity. Netting reduces the need for hard currency but does not eliminate it. For thinly traded currency pairs, the net positions still have to be funded — which is exactly why PACM matters.
• Competing corridors. In many corridors, mobile-money interoperability, fintech remittance providers and existing regional systems already offer fast, cheap alternatives for smaller payments. PAPSS's strongest case is in bank-to-bank and trade payments.
• Awareness among SMEs. The businesses that would gain the most — small importers and exporters trading across African borders — are often the least aware that an alternative to dollar routing exists.

The bigger picture: regional rails are reshaping international payments

PAPSS is not an isolated project. Around the world, regions are building their own interlinking layers: the Arab Monetary Fund's Buna platform connects Arab countries; the central banks of India, Malaysia, the Philippines, Singapore and Thailand are working to link their domestic instant payment systems through Nexus; and in Europe, five national payment schemes have just announced the European Network for Payments to make their apps work across borders.

These initiatives share a common logic. Rather than replacing domestic systems, they connect them — and in doing so they move a growing share of cross-border flows away from the correspondent-banking model, where a handful of global banks and currencies sit in the middle of almost every international payment. For the established rails, this does not mean disappearance: global trade, commodity markets and inter-regional flows will continue to rely on the US dollar and the euro for a long time. But it does mean that within regions, the default is shifting.

For Africa, the stakes are particularly high. Intra-African trade has long been low by international standards, and payment friction is one of the reasons. The AfCFTA can only deliver its promise if paying a supplier in a neighbouring country becomes as simple as paying one at home. PAPSS is the infrastructure designed to make that possible.

What this means for FinTechs

• Payment service providers can access PAPSS as indirect participants through a sponsoring bank, offering their clients local-currency cross-border payments without building their own correspondent network.
• B2B and trade platforms serving African SMEs can integrate PAPSS-enabled banks to offer faster, cheaper supplier payments — a tangible advantage in a market where payment delays tie up working capital.
• International payment companies entering Africa should treat PAPSS as part of the landscape rather than as a competitor to ignore: the corridors where it gains traction are likely to see pricing pressure on traditional routes.

We follow Africa's FinTech markets closely — see our coverage of FinTech in Africa, including Rwanda and Kenya. If you are planning to expand into African markets or build on regional payment infrastructure, talk to us.

Sources: PAPSS — How it works; PAPSS media briefing, Lagos, September 2026; Ecofin Agency, July 2026.