Kenya and other African economies pushing for the Pan-African Payment and Settlement System (PAPSS) stand to save over $5 billion (Sh646 billion) each year if the system is widely adopted.
The platform enables businesses to settle cross-border transactions in local currencies instead of routing payments through correspondent banks outside the continent.
The push gained momentum at the Montran Africa Market Infrastructure Summit held on Thursday, where central banks, regulators, financial institutions and payment technology firms agreed that interoperable payment infrastructure will be critical to unlocking regional trade under the African Continental Free Trade Area (AfCFTA).
The Central Bank of Kenya (CBK) was among the institutions represented at the summit, as the country continued to push for modernisation of its payment ecosystem and strengthening regional financial integration.
According to participants, fragmented payment systems remain one of the biggest barriers to intra-African trade, often forcing businesses to route transactions through correspondent banks outside the continent.
The process increases transaction costs, extends settlement times and exposes businesses to foreign exchange risks.
Financial leaders at the summit said adopting interoperable payment systems and settling transactions in local currencies could significantly reduce these inefficiencies while improving access to regional markets for businesses of all sizes.
“What we are seeing is demand for systems that are inclusive, interoperable, and built for scale, and those systems must be designed with African realities in mind,” said Montran Africa regional executive director, Wohoro Ndohho.
The platform is expected to support implementation of the AfCFTA by making it easier and cheaper for businesses across the continent to trade with one another.
For Kenya, whose businesses are increasingly expanding into regional markets, lower payment costs could improve the competitiveness of exporters, manufacturers, financial institutions and small businesses trading across Africa.
The discussions come as Africa prepares for a sharp increase in cross-border financial flows.
Industry projections presented at the summit indicate that cross-border payment volumes across the continent are expected to nearly triple from $329 billion today to about $1 trillion by 2035, driven by increased regional trade, digital commerce and financial inclusion.
Participants said achieving that growth will require more than new technology. Central banks, regulators, commercial banks and fintech firms will need to align payment standards, strengthen regulatory cooperation and invest in shared financial infrastructure.
Among the priorities identified were wider adoption of the global ISO 20022 financial messaging standard, modern real-time gross settlement (RTGS) systems and regional payment networks capable of processing transactions quickly, securely and at lower cost.
The summit also highlighted the growing convergence between payment systems, mobile money platforms and capital markets, with interoperable infrastructure expected to broaden access to financial services while improving liquidity across African markets.
