A new pan-African payment system removes legacy complexities, including the cost of cross-border payments, bolsters operational efficiencies and sets a new path to more stable and stronger African currencies and is set to spur intra-Africa trade.
A Kenyan customer can now pay for a product from Ghana in Kenya shillings, while the trader receives payment for the goods in Ghanaian cedi, without troublesome conversion issues, following the official launch of a revolutionary payment system in Africa.
The Pan-African Payment and Settlement System (PAPSS) that enables traders make real-time transfers of funds from one African country to another went live in Ghana in January, setting in motion its roll-out to other African countries.
Strengthening local currencies
The Afreximbank, Africa Union and AfCFTA initiative removes the use of the dollar and other third currencies in the transaction matrix, offering a new opportunity to create demand for, and strengthen, local currencies.
Small and Medium Enterprises (SMEs) will be the biggest beneficiaries of a projected 5 billion US dollar in savings on clearance and transactional costs annually, as more people begin to use the continent’s new cross-border payment platform.
The savings will enable small businesses to unlock billions of dollars and ease the financial burden needed by traders to scale beyond their country borders to tap into the world’s largest free-trade zone, the Africa Continental Free Trade Area, with a market value of 3 trillion US Dollars.
“The commercial launch marks a significant milestone in connecting African markets seamlessly. It will provide a fresh impetus for businesses to scale more easily across Africa and is likely to save the continent more than $5 billion in transactions costs every year,” Said, Chief Executive Officer of PAPSS Mike Ogbalu.
https://techcabal.com/2022/01/19/new-pan-african-payment-platform-empowers-smes-and-strengthens-local-currencies/
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