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Saturday, February 4, 2023

New Payment System Seeking To Bolster Intra-African Trade Goes Live

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Payment System Seeking To Bolster Intra-African Trade – A new continent-wide payment system has recently gone live, with the goal of strengthening African fiat currencies and boosting intra-Africa trade. More African countries are still being considered for onboarding.

The Pan-African Payment and Settlement System (PAPSS), a new African payment system, just went online in Ghana, paving the way for its implementation across the continent. The payment system aims to enhance intra-Africa trade while also strengthening African fiat currencies.

The payment system, which was developed by the African Union, Afreximbank, and AfCFTA, aims to lessen Africa’s reliance on the US currency. However, according to a Techcabal study, the pilot phase involved only seven countries, all of which are members of the West African Monetary Zone (WAMZ).

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Also Read: More SA Firms To Explore The Metaverse In 2022

payment-system-seeking-to-bolster-intra-african-trade

Meanwhile, the PAPSS system may benefit the continent’s small-to-medium-sized firms (SMEs), according to the same paper. It goes on to say that when more people start using the PAPSS system, an estimated $5 billion in clearance and transactional costs will be saved each year.

As explained by Mike Ogbalu, CEO of PAPSS, these savings will enable SMEs to scale.
“The commercial launch is a huge step forward in smoothly connecting African markets.” It would provide firms a new push to scale more easily across Africa, saving the region more than $5 billion in transaction expenses each year,” said Ogbalu.

Also Read: Expert NFT Predictions For 2022

Enhanced Cross-Border Commerce

Payment System Seeking To Bolster Intra-African Trade – Like Ogbalu, who says that the new payment system will help the African continent save billions of dollars, Pamela Coke-Hamilton, an executive director at the International Trade Centre, claims that the new payment system will assist SMEs overcome trade restrictions.

According to the executive director:

“ITC is preparing businesses to take advantage of PAPSS, which will open up new prospects for cross-border e-commerce and sustainable trade.”

According to the Techcabal article, talks for enrolling other African central banks are still ongoing. According to the article, Africa is getting closer to establishing a single currency for the entire continent thanks to the new payment system.

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