KCB Group, a leading financial institution in East Africa, has made a significant stride by signing a landmark agreement with the Pan-African Payment and Settlement System (PAPSS).
NAIROBI, KENYA | NOW THEN DIGITAL — KCB Group, the leading financial institution in East Africa, has entered into a groundbreaking agreement with the Pan-African Payment and Settlement System (PAPSS) in Accra, Ghana.
This milestone agreement, inked during the Afrexim Bank Annual Meeting, positions KCB as the first bank in East Africa to join the Pan-African financial market infrastructure.
The deal promises to revolutionize cross-border payments across the continent, fostering faster, more affordable, and secure transactions while significantly boosting intra-African trade.
Empowering African trade and payments
KCB Group’s CEO, Paul Russo, expressed his optimism about the platform’s potential to catalyze economic opportunities across Africa. Leveraging the bank’s extensive payments and collections expertise spanning over 120 years, the partnership with PAPSS opens up a wealth of possibilities for customers.
Russo emphasized that this collaboration would facilitate smoother intra-African trade payments, enabling businesses to capitalize on vast economic opportunities in the region.
“This means that our customers will now have access to vast economic opportunities that will deliver multiple advantages and efficiencies especially when conducting Intra-African trade payments,” KCB Group CEO @Saagite said. pic.twitter.com/loKdL1TD8k
— KCB Group (@KCBGroup) June 23, 2023
“With such partnerships, we shall be able to settle our own transactions including those for all its subsidiaries as well as for other commercial banks without many hurdles.” Group CEO @Saagite said. pic.twitter.com/DCeA01ihr4
— KCB Group (@KCBGroup) June 23, 2023
Advantages of the platform
The centralized Financial Market Infrastructure, developed in collaboration with the African Export-Import Bank (Afreximbank), comes as a timely complement to the Africa Continental Free Trade Area (AfCFTA).
By offering a cost-effective and secure payment clearing and settlement system, the platform replaces existing high-cost and lengthy correspondent banking relationships, streamlining cross-border transactions and other economic activities among African nations.
The transformative benefits of the platform include reducing the time and variability of cross-border payments, enabling real-time payments, alleviating liquidity requirements for commercial banks in cross-border transactions, eliminating transaction value limits, and empowering commercial banks to set applicable exchange rates.
Additionally, it strengthens the oversight of cross-border payment systems by Central Banks.
Expanding reach and vision
The Pan-African Payment and Settlement System network, which currently involves at least 8 Central Banks, 28 commercial banks, and six switches, has already undergone successful pilot runs in six countries of the West African Monetary Zone.
The system is poised to expand its footprint across the five regions of Africa by the end of 2023.
Looking to the future, the platform aims to achieve widespread adoption across Africa. All African Central Banks are expected to join the network by the end of 2024, with all commercial banks onboarded by the end of 2025.
This collective effort is set to further stimulate cross-border trade and economic cooperation, advancing Africa’s position as a unified and thriving economic force on the global stage.
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