The potential emerging system in Africa

The Pan-African Payment & Settlement System (PAPSS) is a financial infrastructure and system created by the Afreximbank to support and facilitate intra-bank financial transactions across the African continent. It was developed and released on 13 January 2022 as an initiative of the African Continental Free Trade Area (AfCFTA) and the African Union to boost multilateral trade between African countries.

How is it different from the SWIFT?

The Society for Worldwide Interbank Financial Telecommunication (SWIFT) is a financial messaging system which permits the communication of financial information between banks worldwide. It is one of the oldest financial systems in the world (created in 1973) and one of the most used across the world (over 11,500 banks worldwide use SWIFT).

Concretely, SWIFT permits one bank in a particular continent to send a transaction order to another bank located in a different continent. Hence, thanks to SWIFT, funds can be transferred worldwide between financial institutions. For example, if a client in Cameroon wants to send funds to his supplier in China, he tells his bank to transfer funds to his supplier’s bank and the bank executes the order. SWIFT uses the BIC Code which is a unique 8 to 11 digit code assigned to every bank.

The advantage of SWIFT is that it is secure, it ensures that funds are safely transferred and it is highly reliable. Despite its worldwide use, SWIFT still has a reasonable number of limitations such as low speed latency (transactions can take up to 5 days). Transaction costs, mainly due to intermediaries, can be very high. It also involves currency exchange and thus a currency exchange risk. Again, just like every information and communication system, it is not 100% secure and is vulnerable to attacks, especially due to the fact that it is used globally.

How is PAPSS different from SWIFT?

PAPSS offers a complete revolution in the sub-regional financial sphere as it provides a fully African-built system which allows instant cross-border payments. Thanks to PAPSS, a client in Cameroon can now settle a transaction with a Ghanaian exporter directly and in local currencies (without passing through foreign intermediaries and currencies like the US Dollar or Euro).

The client passes the order to his local bank, the local bank sends the order to the Central Bank who in turn passes the order to PAPSS. PAPSS then validates the transaction, sends the order to the Ghanaian central bank and thus to the supplier’s bank. The incredible fact about this process is that it happens in no more than 120 seconds.

Adopted by over 150 African banks in more than 18 African countries, PAPSS, unlike SWIFT, offers fast processing of transactions, reduced transaction fees, an autonomous system which understands the needs and challenges of the regional market, and better transparency and traceability of funds.

Why was PAPSS created?

PAPSS is an initiative of the African Union and the African Continental Free Trade Area (AfCFTA) to facilitate intra-trade within the African continent. The system is operated by the Afreximbank (African Export & Import Bank), which equally developed it. The Afreximbank, headquartered in Cairo, Egypt, is a pan-African supranational multilateral financial institution which engages in intra- and extra-African trade.

Afreximbank equally collaborates with African and non-African export credit agencies, development finance institutions, commercial banks, and other multilateral institutions to support trade financial activities in Africa.

PAPSS was mainly created to promote an independent financial system better adapted to the realities of the African continent, promoting regional integration and less reliance on foreign institutions. It was equally created to serve as the backbone of the AfCFTA in the advancement of intra-trade development.

Overall, PAPSS is a strategic infrastructure which acts as an interconnected clearing and settlement platform to facilitate trade in local currencies made by Africa for African countries. Even though its adoption is slow (with negotiations ongoing), countries and central banks are gradually adopting it. This is the case of the Bank of Central African States (BEAC), which announced adopting it soon in early 2026 (per EcoMatin).