In September 2023, Kenya joined the Pan-African Payments and Settlement System (PAPSS), a key step towards boosting intra-African trade under the African Continental Free Trade Area (AfCFTA).
At the time, the Central Bank of Kenya (CBK) signed the necessary instruments, making Kenya the 16th country to join PAPSS and paving way for local banks to adopt the system.
Fast-forward to February 27, 2025, and KCB Group became the first financial institution in East Africa to integrate PAPSS into its systems in a bid to boost cross-border trade in Africa.
By enabling instant, cost-effective, and transparent cross-border payments in local currencies, PAPSS is poised to remove some of the biggest barriers that have historically hindered the free flow of goods and services across the continent.
Through a strategic partnership, KCB has integrated the PAPSS platform into its digital banking ecosystem, allowing its customers to seamlessly facilitate cross-border transactions.
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“The PAPSS-KCB collaboration is a game-changer for businesses and traders of all sizes operating within Africa,” explained Angela Mwirigi, the KCB Group Director for Digital Financial Services, in a one-on-one interview with Swala Nyeti.
Mwirigi added: “By eliminating the need to source hard currencies, we are making cross-border payments more accessible, transparent, and cost-effective for our customers.”
PAPSS is currently operational in 15 African countries, with plans afoot to expand it to 30 by the end of 2025.
This rapid growth underscores the immense demand for a solution that addresses the longstanding challenges of trade between different countries across the African continent.
“One of the key pain points that PAPSS solves is the high cost associated with traditional money transfer methods.
“Through our integration, KCB customers can now send and receive payments across borders while enjoying significantly reduced transaction fees, often below the 3 per cent threshold recommended by the IMF.”
Beyond cost-saving, the instant nature of PAPSS-powered transactions also helps mitigate currency fluctuation risks, a common fear for businesses engaged in cross-border trade.
“With PAPSS, the exchange rate is locked in at the time of the transaction, ensuring that the recipient receives the exact amount intended, without any surprises.”
To ensure seamless adoption, KCB is investing heavily in customer education and support to ensure they are able to seamlessly take advantage of the partnership to conduct business.
“We are providing comprehensive training and guidance to our clients, empowering them to fully leverage the capabilities of PAPSS.
“Our goal is to equip businesses, from large enterprises to small-scale traders, with the knowledge and tools they need to expand their trade networks across Africa.”
The PAPSS-KCB partnership is a crucial step towards enabling the continent to realise its full economic potential, which remains largely hampered owing to cross-border trade barriers.
By easing efficient and cost-effective cross-border transactions, the two institutions are boosting trade and contributing to Africa’s overall economic integration and development.
“By reducing our reliance on imports and strengthening our position as a self-sufficient trading bloc, we can create a more prosperous and sustainable future for all Africans.”
As the PAPSS system continues to gain traction in the region, KCB Group's customers are poised to be at the forefront of this transformative shift in cross-border payments.
With the bank's support and the power of PAPSS, businesses across Africa can look forward to a new era of economic empowerment and growth through easier intra-Africa payments.
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