Revolutionizing Cross-Border Payments: Pesalink Partners with PAPSS to Enhance Financial Integration Across Africa
In a significant move toward financial unification within Africa, Pesalink, Kenya’s leading payment network, has joined forces with the Pan-African Payment and Settlement System (PAPSS). This collaboration aims to simplify and expedite cross-border payments, allowing for instant transactions in local currencies around the clock.
The alliance comes at a crucial time when many African businesses face expensive and slow cross-border payment processes. Current methods often involve high costs, with the World Bank’s 2023 Remittance Prices report indicating that sending money across African borders can incur charges of 7-8%, surpassing the global average of 6-7%. Additionally, settlement times typically range from three to seven business days.
By connecting over 80 participants from the Pesalink network—including banks, fintech companies, and mobile money service providers—with more than 160 banks on the PAPSS platform, the new partnership is set to significantly reduce these costs and improve efficiency.
“Instant and seamless cross-border payments are essential for enhancing trade relationships and stimulating economic growth across the continent,” said Mike Ogbalu III, CEO of PAPSS, during the partnership announcement in Nairobi. “Collaborating with national and private switches like Pesalink is vital for driving this transformation.”
With Pesalink now recognized as a Technical Connectivity Provider, its integration into the PAPSS ecosystem means that individual users and small to medium-sized enterprises (SMEs) will benefit from simplified transactions, which previously relied on complex correspondent banking arrangements and foreign currency reserves.
Gituku Kirika, CEO of Pesalink, emphasized the advantages for Kenyan banks and their customers. “With this partnership, banks in Kenya can now offer faster and more cost-effective cross-border payment solutions, fostering stronger regional trade and allowing businesses to thrive in a digital economy that is increasingly interlinked,” he stated.
Pesalink operates as an instant and interoperable payment system, managed by Integrated Payment Services Limited (IPSL) and backed by the Kenya Bankers Association. Handling payments 24/7 through various platforms—including apps, online portals, and USSD—Pesalink has established itself as a crucial component of Kenya’s real-time payments infrastructure since its inception in 2015.
Similarly, PAPSS, initiated by the African Export-Import Bank (Afreximbank) in collaboration with the African Union and the African Continental Free Trade Area (AfCFTA) Secretariat, aims to streamline payment processes across the continent. By minimizing risks and ensuring secure transactions, it facilitates financial integration and trade across African nations. Currently, the platform supports more than 160 commercial banks.
As the partnership unfolds, the prospect of hassle-free and inexpensive cross-border transactions may enable individuals and businesses across Africa to expand their operating horizons, promoting regional trade and economic collaboration.
This initiative represents a crucial step toward mitigating the barriers that have historically hampered African financial systems, positioning the continent for more substantial economic growth and connectivity.
With the integration of Pesalink and PAPSS, the landscape of banking and finance in Africa is poised for a transformation that could reshape the way transactions are conducted across borders.
— Reported by Nexio News
