Post by Trade facilitator on Nov 7, 2022 12:41:10 GMT 1
AfCTA: Nigeria Records First PAPSS Transaction in Africa – A Step In The Right Direction
Nigeria has emerged as the first country in Africa to record the first successful transaction through the Pan-African Payment and Settlement System (PAPSS).
This comes after the payment gateway was conceptualized January 2022, in a bid to promote and aid the African Continental Free Trade Area (AfCFTA).
The feat recorded by PAPSS in Africa was in collaboration with the Africa Export-Import Bank (Afreximbank) in partnership with the African Union (AU) and the AfCFTA.
THISDAY gathered that the first transaction on the PAPSS platform was made possible by the Nigeria Inter-Bank Settlement System Plc (NIBSS) and the successful transaction occurred between the Ghana Commercial Bank and First Bank of Nigeria Plc.
PAPSS serves as a cross-border payments and settlement platform for the African continent. It is available leveraging the NIBSS Instant Payment platform for commercial banks, Fintechs, payment service providers, card schemes, and other payment industry players to integrate for Intra-African Trade and other economic activities among African countries.
The payment platform aims at simplifying transactions by transforming and facilitating payment, clearing and settlement for cross-border trade across Africa.
PAPSS recognizes over 41 currencies and it enables instant, diaspora payments in local currencies between African markets.
It provides an opportunity for a customer in one African country to pay in their own currency, while the beneficiary in another country receives value in their own local currency.
It was also designed to reduce transaction time and cost of cross-border financial services by curbing dependency on hard currency and major unknown transaction delays. Banks at various stages of connection through NIBSS for the PAPSS integration, it was gathered that deposit money banks are currently undergoing certification, integration, and migration to the PAPSS will Go-live and also consummate live transactions in the coming weeks.
What exactly is PAPSS?
Pan-African Payment and Settlement System (PAPSS) aims to be a revolutionary financial market Infrastructure that enables instant, cross-border payments in local currencies between African AfCFTA member nations. The infrastructure will help simplify cross-border transactions, thereby reducing the dependency on hard currencies for these transactions.
According to Afreximbank, PAPSS will serve as a continent-wide platform for the processing, clearing and settling of intra-African trade and commerce payments, leveraging a multilateral net settlement system.
To note, at present, over 80 per cent of African cross-border transactions originating from the continent’s banks are currently cleared and settled offshore. This creates inefficiencies and increases the cost of African cross-border payments. Once PAPSS is fully implemented, it is expected to save the African continent over $5billion in payment transaction costs annually.
PAPSS launching follows a successful pilot phase in the countries of the West African Monetary Zone (WAMZ), with live transactions done in an instant. The WAMZ member countries are Gambia, Ghana, Guinea, Liberia, Nigeria and Sierra Leone.
With the benefits of PAPSS at a government level – some benefits include promoting financial inclusion (a key challenge in Africa as a whole), increased transparency and easing pressure on current accounts and decreased foreign exchange liquidity. From a consumer and business level, benefits include instant/near instant payments without converting to other currencies as well as improved working capital with payment certainty.
With PAPSS and a free trade agreement such as the implementation of AfCFTA, it will overall promote synergies, trade and investment, and wider economic development and prosperity in the area amongst member nations.
How does PAPSS work?
According to PAPSS, it will ensure instant or near-instant transfers of funds between originators in one African country and beneficiaries in another.
First, an originator will issue a payment instruction in their local currency (say the Naira) to their payment service provider or bank. Then, the payment instructions are sent to PAPSS. Afterwards, PAPSS will carry out the necessary validation checks on the payment instruction.
With the next step, the payment instruction is then forwarded to the beneficiary’s payment service provider or bank. And, finally, the beneficiary’s bank will clear the funds to the beneficiary in their local currency (say the Cedi).
In a nutshell, the way the network works is by collaborating with Africa’s central banks. Together, they’ve created a centralized payment and settlement infrastructure, on which African commercial banks, payment service providers and fintechs can join as fellow participants.
As of 26 April 2022, PAPSS has expanded its footprints across Africa with eight central banks, six switches and about 25 of the largest commercial banks on the continent. PAPSS has signed very significant strategic relationships with other key institutions.
Our company is one of the best companies in Agro-Export Business in Nigeria today. We train individuals and corporate organizations on how to do Export Business the right way; if you are interested, please contact the admin of this forum now for further details.
Nigeria has emerged as the first country in Africa to record the first successful transaction through the Pan-African Payment and Settlement System (PAPSS).
This comes after the payment gateway was conceptualized January 2022, in a bid to promote and aid the African Continental Free Trade Area (AfCFTA).
The feat recorded by PAPSS in Africa was in collaboration with the Africa Export-Import Bank (Afreximbank) in partnership with the African Union (AU) and the AfCFTA.
THISDAY gathered that the first transaction on the PAPSS platform was made possible by the Nigeria Inter-Bank Settlement System Plc (NIBSS) and the successful transaction occurred between the Ghana Commercial Bank and First Bank of Nigeria Plc.
PAPSS serves as a cross-border payments and settlement platform for the African continent. It is available leveraging the NIBSS Instant Payment platform for commercial banks, Fintechs, payment service providers, card schemes, and other payment industry players to integrate for Intra-African Trade and other economic activities among African countries.
The payment platform aims at simplifying transactions by transforming and facilitating payment, clearing and settlement for cross-border trade across Africa.
PAPSS recognizes over 41 currencies and it enables instant, diaspora payments in local currencies between African markets.
It provides an opportunity for a customer in one African country to pay in their own currency, while the beneficiary in another country receives value in their own local currency.
It was also designed to reduce transaction time and cost of cross-border financial services by curbing dependency on hard currency and major unknown transaction delays. Banks at various stages of connection through NIBSS for the PAPSS integration, it was gathered that deposit money banks are currently undergoing certification, integration, and migration to the PAPSS will Go-live and also consummate live transactions in the coming weeks.
What exactly is PAPSS?
Pan-African Payment and Settlement System (PAPSS) aims to be a revolutionary financial market Infrastructure that enables instant, cross-border payments in local currencies between African AfCFTA member nations. The infrastructure will help simplify cross-border transactions, thereby reducing the dependency on hard currencies for these transactions.
According to Afreximbank, PAPSS will serve as a continent-wide platform for the processing, clearing and settling of intra-African trade and commerce payments, leveraging a multilateral net settlement system.
To note, at present, over 80 per cent of African cross-border transactions originating from the continent’s banks are currently cleared and settled offshore. This creates inefficiencies and increases the cost of African cross-border payments. Once PAPSS is fully implemented, it is expected to save the African continent over $5billion in payment transaction costs annually.
PAPSS launching follows a successful pilot phase in the countries of the West African Monetary Zone (WAMZ), with live transactions done in an instant. The WAMZ member countries are Gambia, Ghana, Guinea, Liberia, Nigeria and Sierra Leone.
With the benefits of PAPSS at a government level – some benefits include promoting financial inclusion (a key challenge in Africa as a whole), increased transparency and easing pressure on current accounts and decreased foreign exchange liquidity. From a consumer and business level, benefits include instant/near instant payments without converting to other currencies as well as improved working capital with payment certainty.
With PAPSS and a free trade agreement such as the implementation of AfCFTA, it will overall promote synergies, trade and investment, and wider economic development and prosperity in the area amongst member nations.
How does PAPSS work?
According to PAPSS, it will ensure instant or near-instant transfers of funds between originators in one African country and beneficiaries in another.
First, an originator will issue a payment instruction in their local currency (say the Naira) to their payment service provider or bank. Then, the payment instructions are sent to PAPSS. Afterwards, PAPSS will carry out the necessary validation checks on the payment instruction.
With the next step, the payment instruction is then forwarded to the beneficiary’s payment service provider or bank. And, finally, the beneficiary’s bank will clear the funds to the beneficiary in their local currency (say the Cedi).
In a nutshell, the way the network works is by collaborating with Africa’s central banks. Together, they’ve created a centralized payment and settlement infrastructure, on which African commercial banks, payment service providers and fintechs can join as fellow participants.
As of 26 April 2022, PAPSS has expanded its footprints across Africa with eight central banks, six switches and about 25 of the largest commercial banks on the continent. PAPSS has signed very significant strategic relationships with other key institutions.
Our company is one of the best companies in Agro-Export Business in Nigeria today. We train individuals and corporate organizations on how to do Export Business the right way; if you are interested, please contact the admin of this forum now for further details.
