{"id":3695,"date":"2022-12-01T00:00:00","date_gmt":"2022-12-01T00:00:00","guid":{"rendered":"https:\/\/staging.azafinance.com\/2022\/12\/01\/papss-what-it-is-benefits-and-how-it-works\/"},"modified":"2024-11-21T14:27:25","modified_gmt":"2024-11-21T14:27:25","slug":"papss-what-it-is-benefits-and-how-it-works","status":"publish","type":"post","link":"https:\/\/azafinance.com\/papss-what-it-is-benefits-and-how-it-works\/","title":{"rendered":"PAPSS: What It Is, Benefits, and How It Works","gt_translate_keys":[{"key":"rendered","format":"text"}]},"content":{"rendered":"<p><span data-preserver-spaces=\"true\">Cross-border trading is high on the agenda, with the\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/azafinance.com\/afcfta-overview-purpose-and-benefits\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">African Continental Free Trade Area (AfCFTA)<\/span><\/a><span data-preserver-spaces=\"true\">\u00a0agreement now a reality. PAPSS, or the Pan-African Payment and Settlement System, is primed to facilitate the expected increased volumes of cross-border payments.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">PAPSS is a cross-border financial market infrastructure enabling\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/azafinance.com\/payments\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">payment<\/span><\/a><span data-preserver-spaces=\"true\">\u00a0transactions across Africa. It addresses the historical challenges of making payments across African borders, adding value through a typical African market infrastructure for all stakeholders, from governments, banks, and payment providers to corporates, small enterprises, and individuals.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">The PAPSS has been piloted successfully in the six countries that comprise the West African Monetary Zone (WAMZ)\u2014Nigeria, the Gambia, Sierra Leone, Liberia, Ghana, and Guinea.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">The benefits and purposes of PAPSS are ever-expanding &#8211; read on to learn more!<\/span><\/p>\n<h4><b>Benefits of PAPSS for participants<\/b><\/h4>\n<p><span data-preserver-spaces=\"true\">Financial intermediaries, commercial banks, fintech companies, and payment service providers (PSPs) \u2013 Direct Participants and Indirect Participants \u2013 who facilitate cross-border payments for their clients reap the benefits of PAPSS. Here\u2019s what they can expect:<\/span><\/p>\n<ul>\n<li><span data-preserver-spaces=\"true\">A platform for innovation and creativity + increasing access to markets<\/span><\/li>\n<li><a class=\"editor-rtfLink\" href=\"https:\/\/azafinance.com\/financial-technology\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">API<\/span><\/a><span data-preserver-spaces=\"true\">\u00a0capability that enhances scale, performance, security, and privacy<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">Faster and more efficient customer service<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">Simplified cross-border payment performance &#8211; no longer requiring multiple correspondent banking relationships\u00a0<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">Analytical information for management reporting from ISO 20022 standard messaging to support informed decision-making<\/span><\/li>\n<\/ul>\n<h4><b>Benefits of PAPSS for African governments<\/b><\/h4>\n<p><span data-preserver-spaces=\"true\">Governments and central banks connecting with PAPSS receive a wealth of benefits as well:<\/span><\/p>\n<ul>\n<li><span data-preserver-spaces=\"true\">Decreased\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/azafinance.com\/foreign-exchange\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">foreign exchange<\/span><\/a><span data-preserver-spaces=\"true\">\u00a0liquidity + eased pressure on current accounts<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">Increased transparency for greater oversight of cross-border transactions, which increases the potential to generate revenue<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">Enhanced financial inclusion and improved economic growth<\/span><\/li>\n<\/ul>\n<h4><b>Benefits of PAPSS for customers<\/b><\/h4>\n<p><span data-preserver-spaces=\"true\">Businesses large and small, as well as individuals whose payments and remittances are being processed through PAPSS, benefit from the following:<\/span><\/p>\n<ul>\n<li><span data-preserver-spaces=\"true\">Near instant payments across African borders without converting to different currencies<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">Improved working capital through payment certainty and faster transactions<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">Access to payment-facilitating options for millions of Africans, including those previously underserved<\/span><\/li>\n<\/ul>\n<h4><b>Types of Participants<\/b><\/h4>\n<p><strong><span data-preserver-spaces=\"true\">Direct Participants<\/span><\/strong><span data-preserver-spaces=\"true\">\u00a0maintain a settlement account with the central bank of the country in which they operate to effect pre-funding.<\/span><\/p>\n<p><strong><span data-preserver-spaces=\"true\">Indirect Participants<\/span><\/strong><span data-preserver-spaces=\"true\">\u00a0do not maintain a settlement account in the country of operation. Instead, they have a relationship with a direct participant as they will need the direct participant\u2019s liquidity to fund or defund clearing accounts.<\/span><\/p>\n<h4><b>Sending payments using the PAPSS involves the following steps:<\/b><\/h4>\n<p><span style=\"font-weight: 400;\">1) A company issues a payment instruction to their local bank or payment service provider<\/span><\/p>\n<p><span style=\"font-weight: 400;\">2) The bank sends instructions to its Central Bank, which sends them to PAPSS<\/span><\/p>\n<p><span style=\"font-weight: 400;\">3) PAPSS validates the instruction and forwards it to the beneficiary\u2019s Central Bank and then a local bank<\/span><\/p>\n<p><span style=\"font-weight: 400;\">4) The local bank pays the transferred funds in local currency to the beneficiary<\/span><\/p>\n<h4><b>Purpose of PAPSS<\/b><\/h4>\n<p>The PAPSS was developed by the African Export-Import Bank in collaboration with the African Continental Free Trade Area (AfCFTA) Secretariat. It uses a digital, cloud-based platform designed by StoneX. By facilitating the settlement of payments, PAPSS aims to support increased African trade under the AfCFTA. African Central Banks oversee the governance and daily operation of the PAPSS, which is headquartered in Cairo, Egypt. PAPSS is only exchanged for legal tender, not digital assets like cryptocurrencies or Central Bank Digital Currencies.<br \/>\nPAPSS enables the efficient flow of money securely across African borders, minimising risk and contributing to financial integration across the regions.<br \/>\nWhether shopping, transferring money, paying salaries, dealing in stocks and shares, or making high-value business transactions, PAPSS\u2019 real-time infrastructure provides a reliable, cost-effective answer for instant payments.<br \/>\nPAPSS works in collaboration with Africa\u2019s central banks to provide a payment and settlement service to which commercial banks, payment service providers, and fintech across the region can connect as \u2018Participants\u2019.<\/p>\n<h6><span style=\"font-weight: 400;\">To learn more about PAPSS, schedule a call with our payment experts <\/span><span style=\"font-weight: 400;\"><a href=\"https:\/\/bit.ly\/4eEiKyn\" target=\"_blank\" rel=\"noopener\">here<\/a>.<\/span><\/h6>\n","protected":false,"gt_translate_keys":[{"key":"rendered","format":"html"}]},"excerpt":{"rendered":"<p>Cross-border trading is high on the agenda, with the\u00a0African Continental Free Trade Area (AfCFTA)\u00a0agreement now a reality. PAPSS, or the Pan-African Payment and Settlement System, is primed to facilitate the expected increased volumes of cross-border payments. PAPSS is a cross-border financial market infrastructure enabling\u00a0payment\u00a0transactions across Africa. It addresses the historical challenges of making payments across [&hellip;]<\/p>\n","protected":false,"gt_translate_keys":[{"key":"rendered","format":"html"}]},"author":1,"featured_media":3696,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[21],"tags":[254,476,477,258,259,478,479,449,480],"class_list":["post-3695","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-resources","tag-afcfta","tag-afreximbank","tag-african-export-import-bank","tag-b2b-payments","tag-cross-border-payments","tag-pan-african-payment-and-settlement-system","tag-papss","tag-trade","tag-west-african-monetary-zone"],"acf":[],"gt_translate_keys":[{"key":"link","format":"url"}],"_links":{"self":[{"href":"https:\/\/azafinance.com\/wp-json\/wp\/v2\/posts\/3695","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/azafinance.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/azafinance.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/azafinance.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/azafinance.com\/wp-json\/wp\/v2\/comments?post=3695"}],"version-history":[{"count":0,"href":"https:\/\/azafinance.com\/wp-json\/wp\/v2\/posts\/3695\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/azafinance.com\/wp-json\/wp\/v2\/media\/3696"}],"wp:attachment":[{"href":"https:\/\/azafinance.com\/wp-json\/wp\/v2\/media?parent=3695"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/azafinance.com\/wp-json\/wp\/v2\/categories?post=3695"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/azafinance.com\/wp-json\/wp\/v2\/tags?post=3695"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}