KCB Group onboards Pan-African payment system to boost trade

KCB Group has become the first lender in East Africa to integrate the Pan-African Payment and Settlement System into its systems, setting Kenya and the region at a better place to tap into continental trade.

This comes as the continent continues to push for the African Continental Free Trade Area (AfCFTA), with investments being made in supportive infrastructure.

The move will enable real-time settlements, reduce costs associated with currency conversion and increase access to new markets across Africa, with the lender committing to enhance cross-border trade and financial integration across the continent Pan-African Payment and Settlement System (PAPSS) is a centralised financial market infrastructure developed by the African Export-Import Bank (Afreximbank) to facilitate real-time cross-border payments and trade transactions, reducing both costs and processing times.

Notably, the system’s net settlement mechanism will help alleviate pressure on the demand for foreign currencies, supporting a more efficient and sustainable regional trade framework.

The platform puts KCB at the forefront of facilitating trade across Africa as it continues to play a pivotal role in driving Africa’s economic transformation and reinforcing its position as a leading financial institution in the continent.

“We want to play a bigger role in catalyzing trade and payments in Africa and beyond, leveraging our digital capabilities and regional footprint. Our entry into PAPSS aligns perfectly with our strategy of supporting economic growth in Kenya and across Africa by facilitating seamless financial transactions,” KCB Group CEO Paul Russo said during the unveiling in Nairobi, yesterday.

With a presence in seven East African countries, KCB brings on board its payments and collections expertise spanning over a century.

This means that its customers will now have access to vast economic opportunities that will deliver multiple advantages and efficiencies especially when conducting intra-African trade payments.

According to PAPSS CEO Mike Ogbalu, 15 Central Banks, over 150 commercial banks and 14 switches across Eastern, Western, Northern and Southern Africa are so far on board the system, promoting greater access to services and economic integration.

The network expects to add more Central Banks soon, broadening citizen benefits from AfCFTA. “We aim to create a connected and integrated economy, empower businesses and communities in Africa,” Oglabu said.

Central Bank of Kenya director for banking and payment and services, Michael Eganza, said the regulator is keen to enable financial players to bolster the payments ecosystem for an opportunity to enable cross-border transactions.

So far, eight lenders have been approved to integrate with PAPSS with at least four pending applications.

“We are increasingly looking at reinvigorating the regulatory regime to promote innovation and deepen financial inclusion within the industry,” Eganza said.

Trade CS Lee Kinyanjui said: “The liberation of the African economies will only be achieved when the balance of payment challenges within the continent are eliminated.

With intra-Africa trade currently at 14 per cent, there is an opportunity to progressively evaluate the opportunities that can be harnessed.”