The Pan-African Payment and Settlement System (PAPSS) is setting ambitious targets to achieve full continental coverage within the next five years. This initiative comes as the organization embarks on its second strategic plan aimed at enhancing the adoption and utilization of its cross-border payment infrastructure. Mike Ogbalu, the CEO of PAPSS, revealed the plans during a press conference held in Lagos, where he outlined the organization's vision for the future of payments across Africa.
Currently, PAPSS has successfully connected 30 countries, which are represented by approximately 26 central banks and over 200 financial institutions across the continent. The goal is to increase the number of connected countries to about 38 by the end of 2026, achieving 80% coverage of the continent, including all major African economies. Ogbalu emphasized that the only significant market not yet integrated into the system is South Africa, but he remains optimistic about ongoing engagements with that country.
In the first phase of its strategic plan, PAPSS focused on building the necessary infrastructure and governance framework to support instant cross-border payments. Now, the focus will shift towards deepening usage and delivering tangible value to end users. Ogbalu stated, "In phase one, we dealt with spread. But today, in our phase two, it is all about deepening, taking the value that we created and actually making it available where it matters most to the end users."
The second phase of PAPSS's strategy will prioritize the development of solutions tailored to remittances, merchant payments, and other cross-border services. This includes the introduction of application programming interfaces (APIs) that will enable businesses and payment providers to access accounts connected to PAPSS through a single interface. Ogbalu highlighted that the rapid expansion of the network will be complemented by a greater emphasis on digital channels, which are crucial for increasing transaction volumes and reaching consumers and small businesses.
The CEO noted that PAPSS has already seen significant growth in transaction volumes, with an increase of over 1,000% compared to the previous year, particularly among smaller businesses. There has also been a notable shift from cash and bank-branch transactions towards digital channels, with banks reporting a three- to fourfold increase in transaction numbers after integrating PAPSS into their digital banking platforms.
However, achieving full continental coverage poses challenges, particularly in addressing the differences in national regulations, technology infrastructure, and levels of central bank support across various countries. Ogbalu pointed out that different central banks operate at different paces and have varying perceptions of the value that PAPSS brings. Some countries have expressed concerns about relinquishing control over their domestic payment infrastructure, while others face geopolitical or regulatory hurdles that hinder adoption.
To mitigate these concerns, Ogbalu reassured stakeholders that PAPSS is designed to complement existing regional and domestic payment systems. He stated, "We have said to them that if you like your payment system, keep it, but connect it into PAPSS." This approach aims to foster collaboration rather than competition among payment systems across the continent.
The second strategic plan is also expected to enhance PAPSS's role in supporting the African Continental Free Trade Area (AfCFTA) by making cross-border payments faster, cheaper, and more accessible for businesses operating across African markets. Ogbalu emphasized that the ultimate goal is to create an integrated payment ecosystem that enables Africans to trade across borders without relying heavily on external payment infrastructures.
As PAPSS moves forward with its ambitious plans, it is clear that the organization is committed to transforming the landscape of cross-border payments in Africa. The focus on deepening usage and expanding access to digital channels will be crucial in achieving the goal of full continental coverage by 2026. With the support of central banks, financial institutions, and the broader business community, PAPSS aims to play a pivotal role in facilitating trade and economic growth across the continent, aligning with the objectives of the AfCFTA and Agenda 2063.