The Pan-African Payment and Settlement System (PAPSS) has expanded its network with the addition of Ethiopia’s central bank, bringing the country closer to full integration into Africa’s financial and payments ecosystem. The development marks another step in the growth of a platform designed to facilitate cross-border transactions across the continent using local currencies.
PAPSS was created to support trade and commerce by reducing the cost of cross-border payments and simplifying the way businesses transact across African markets. Ethiopia’s participation strengthens the reach of the network as it continues to expand across the continent.
How the Pan-African Payment and Settlement System (PAPSS) Supports Cross-Border Trade
PAPSS enables parties to conduct transactions directly in local currencies. By allowing businesses to settle payments without relying on the U.S. dollar, the system aims to reduce transaction costs and improve the efficiency of cross-border trade. It also removes the need for correspondent banks abroad that traditionally handled payment routing for international transactions.
The platform is designed to complement broader regional trade integration efforts, including the implementation of the African Free Trade Area. By providing payments infrastructure that supports commerce between African countries, PAPSS seeks to make trade settlement more seamless across participating markets.
According to a statement attributed to Eyob Tekalign, Ethiopia’s integration into the network is part of ongoing efforts to modernize the country’s financial system and strengthen economic connections with the rest of Africa.
PAPSS Continues to Expand Across Africa
Launched in January 2022 with just 10 commercial banks, PAPSS has expanded significantly. The network now operates in more than 15 countries and includes more than 150 commercial banks. Participating countries include Nigeria, Zambia, Malawi, Kenya, and Tunisia, among others. South Africa remains outside the network.
The addition of Ethiopia extends the platform’s geographic reach and further broadens access to cross-border payment capabilities for businesses and financial institutions across the continent. As more countries join, PAPSS continues to develop as a mechanism for facilitating trade and financial connectivity within Africa.
Ethiopia’s entry into the Pan-African Payment and Settlement System (PAPSS) represents another milestone in the growth of Africa’s payments infrastructure. By enabling direct local-currency transactions, reducing dependence on correspondent banking arrangements, and supporting the objectives of the African Free Trade Area, PAPSS continues to expand its role in facilitating cross-border trade. With more than 150 commercial banks across over 15 countries already connected, the network’s reach continues to grow as African economies pursue deeper financial integration.