Kenya’s Trade Gains as PAPSS Scales Local‑Currency Payments Across Africa

Kenyan businesses involved in cross‑border trade could significantly lower their payment costs and diminish dependence on foreign currencies as the Pan‑African Payment and Settlement System (PAPSS) continues to expand its footprint across the continent.

The platform enables firms to send and receive funds directly in participating African currencies, aiming to tackle the high expense of settling transactions through traditional banking channels, where traders typically rely on the US dollar as an intermediary.

CEO Mike Ogbalu explained that the system cuts the need for foreign currency in trade by allowing participating countries to net offsets on reciprocal payments, settling only the net difference in an approved currency.

This could relieve pressure on importers and exporters operating across African markets, especially in Kenya, where foreign‑exchange access and transaction costs continue to be major concerns for traders.

Ogbalu added, “Instead of sourcing the full amount of each transaction in foreign currency, only the net difference is settled, markedly cutting reliance on third‑party currencies in trades such as those between Kenya and Nigeria.”

For example, a Kenyan seller exporting to a Ugandan buyer can receive payment in Kenyan shillings while the buyer remits the funds in Ugandan shillings.

He noted that transactions are processed in under 120 seconds, a stark contrast to conventional methods that can take several days for funds to clear.

PAPSS also targets lower fees, capping its average infrastructure charge at roughly 0.1 % of the transaction value, versus the 8‑10 % typically incurred with traditional cross‑border payments and remittances.

Nevertheless, customers may not see the full benefit of these savings because participating financial institutions can add their own markup.

One of our core design goals has been to keep transaction costs low. Our average fees now sit at about 0.1 % of the value, but some participants still add a margin, which dilutes the intended affordability for end customers.

Kenya ranks among the early adopters of PAPSS, with domestic banks such as KCB Group and Equity Bank already linked to the network.

Nevertheless, translating the infrastructure rollout into broad usage—especially among small and medium‑sized enterprises that could reap the benefits of cheaper regional trade—remains a work in progress.

Ogbalu reported a staggering over 1,000 % increase in adoption from last year to this year, yet he did not reveal specific transaction volumes or the tangible benefits accrued by Kenyan businesses thus far.

He added that the organization has not yet completed a comprehensive assessment of the platform’s impact on trade and business activities.

The system now spans 31 African nations and has onboarded more than 220 commercial banks and 17 payment switches, of which 12 are national switches.

The organization aims to increase its footprint to 37 countries by the close of 2026 and to at least 50 countries by 2027, shifting focus thereafter toward boosting transaction volumes and broader business uptake.

In addition to payments, PAPSS launched an Africa Currency Marketplace that aligns demand and supply for various African currencies, as well as a card scheme intended to enable intra‑African payments without dependence on external settlement infrastructure.

This expansion aligns with African governments’ efforts to deepen intra‑African trade under the African Continental Free Trade Area, where fragmented payment systems and limited currency convertibility continue to hinder a fully integrated regional market.

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