Ghana’s 1st PAPSS Cross-Border Real-Time Transfer Marks a New Milestone

Recently, GCB Bank, one of the largest banks in Ghana, marked a significant milestone with its first cross-border real-time transfer in connection with the Pan-African Payment and Settlement System (PAPSS). Read ahead to find out more about the importance of this event in the context of PAPSS and gain insights regarding the initiative’s future developments!

What Is the Pan-African Payment and Settlement System?

The system aims to address some of the major challenges associated with cross-border payments and settlements in Africa, such as:

• High transaction costs
• Long processing times
• Currency conversion issues
• Limited interoperability
• Cybersecurity risks

Thus, PAPSS is designed to provide a low-cost, fast, and secure means of conducting cross-border payments, thereby enhancing economic growth and development on the continent. The system is open to all African countries, and its adoption is expected to increase over time as more jurisdictions seek to leverage its benefits.

The system was formally launched in January 2022 and currently has central banks of nine African countries connected to its network, namely:

• Djibouti
• Gambia
• Ghana
• Guinea
• Liberia
• Nigeria
• Sierra Leone
• Zambia
• Zimbabwe

What’s more, PAPSS also has many strategic partnerships with commercial banks and other payment-related services, which makes it a tool that will inevitably play a critical role in the transformation of the African payments landscape.

Why Is Ghana’s Participation in PAPSS Important?

Ghana’s first transaction linked to PAPSS occurred on March 8, 2023. A Ghanaian company initiated a supplier payment from GCB in Ghana Cedis to a recipient in Nigeria who received the payment in Naira instantly.

According to Mr. Kofi Adomakoh, the Managing Director of GCB, the bank is thrilled to be among the first adopters of such an innovative and cutting-edge technology platform as PAPSS. He also expressed his belief that this system is a vital enabler for the African Continental Free Trade Area (AfCFTA) agenda.

Ways in Which PAPSS Is Expected to Change Payments in Ghana

The PAPSS integration is expected to bring a wide array of benefits to Ghana, namely:

• Increased payment efficiency. The PAPSS integration will make it faster and easier for Ghanaian businesses and individuals to conduct cross-border transactions, as they will no longer need to rely on slow and outdated payment systems.
• Reduced transaction costs. The integration of PAPSS is likely to result in cost savings for both consumers and businesses in Ghana, as it eliminates the need for intermediaries and uses real-time settlement mechanisms.
• Better accessibility. PAPSS makes modern payment systems more accessible to those who were previously excluded or underserved.
• Enhanced international trade. Improved cross-border payment systems can be helpful in promoting international trade between Ghana and other countries, which could lead to increased investment and economic opportunities.
• Better security and transparency. The PAPSS integration is set to significantly improve security and transparency in Ghana’s cross-border transfers by providing real-time tracking and monitoring of transactions.

As you can see, the implementation of the Pan-African Payment and Settlement System has plenty of advantages for Ghana’s payments landscape, which makes its adoption perspectives in other countries very promising.

What’s Next for PAPSS?

Despite GCB’s immense contribution, the adoption of the Pan-African Payment and Settlement System in Ghana is still in its early stages. However, the government of Ghana has expressed its commitment to promoting the use of PAPSS as part of its efforts to increase financial inclusion and boost economic advancements.

The situation is similar in other areas of the African continent, with many countries actively working toward integrating PAPSS into their financial systems. Besides, the African Export-Import Bank (Afreximbank), which developed and operates PAPSS, has been working closely with African authorities and financial institutions to promote the adoption of the platform.

Overall, the integration of PAPSS into financial systems across Africa is still ongoing, but progress has been made, and there is growing momentum toward the expansion of the platform across the continent.