KCB Group has signed a deal with the Pan-African Payment and Settlement System (PAPSS) to facilitate cross-border transactions on the continent. The agreement, which was signed in Accra, Ghana on the sidelines of the Afrexim Bank Annual Meeting, makes KCB the first bank in East Africa to join the platform that provides a secure and efficient channel for processing payments among African countries.
KCB Group CEO, Paul Russo, said the platform will guarantee speed, affordability, and reliability of transactions, effectively boosting intra-African trade and payments.
“With this agreement, we bring on board our payments and collections expertise spanning over 120 years. 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,” he said.
The platform is a centralized financial market infrastructure developed in collaboration with the African Export-Import Bank (Afreximbank) to complement trading under the Africa Continental Free Trade Area (AfCFTA). It aims to reduce the reliance on costly and lengthy correspondent banking relationships and enable real-time payments across Africa.
“As a pan-African banking institution, it is our desire to play a bigger role in facilitating trade across Africa and beyond. 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,” Russo said.
The platform will deliver multiple benefits and efficiencies to intra-African trade payments that include:
- A reduction in the duration and time variability of cross-border payments across Africa
- A decrease in the liquidity requirements of commercial banks for cross-border payments
- A removal of transaction value limits
- Enablement of commercial banks to set the applicable exchange rates
- A strengthening of oversight of cross-border payment systems by central banks
The Pan-African Payment and Settlement System network currently consists of at least eight central banks, 28 commercial banks, and six switches. It has successfully been piloted in the six countries of the West African Monetary Zone and is expected to expand into the five regions of Africa before the end of 2023. Additionally, all African central banks are expected to sign up by the end of 2024 while all commercial banks by the end of 2025.
KCB Group is a financial services holding company based in Nairobi, Kenya with subsidiaries in Uganda, Tanzania, Rwanda, Burundi, Ethiopia, and South Sudan. It also owns KCB Bancassurance Intermediary, KCB Capital, KCB Foundation, National Bank of Kenya, and all associated companies. The group has an asset base of over 1.6 trillion Kenyan shillings (about 14.6 billion US dollars) and serves over 32 million customers across seven countries.
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