Cross-border payments will become easier in East Africa with the Kenya Central Bank (KCB) joining the Pan-African Payment and Settlement System (PAPSS), the first bank in the region to do so.
The centralised financial market platform, developed by the African Export-Import Bank (Afreximbank), facilitates cross-border payments and trade transactions, reducing both costs and processing times, according to Africa Business Communities.
The system features a net settlement mechanism that helps alleviate the demand for foreign currencies.
‘We want to play a bigger role in catalysing trade and payments in Africa and beyond, leveraging our digital capabilities and regional footprint. Our entry into PAPSS aligns perfectly with our strategy of supporting economic growth in Kenya and across Africa by facilitating seamless financial transactions,’ says KCB Group CEO Paul Russo.
PAPSS, which now includes 15 central banks, more than 150 commercial banks and 14 switches across East, West, North and Southern Africa, will support real-time payments, decrease the liquidity requirements of commercial banks for cross-border payments, remove transaction value limits, enable commercial banks to set the applicable exchange rates and strengthen oversight of cross- border payment systems by central banks.
