Standard Bank has signed a memorandum of understanding with the Pan African Payment and Settlement System (PAPSS), a financial market infrastructure established by Afreximbank and the AfCFTA secretariat.
- Cross-Border Transactions: The partnership aims to facilitate faster and more efficient cross-currency, cross-border transactions within the Standard Bank group. This will help streamline and expedite cross-border currency payments and settlements without relying on offshore correspondent banks.
- Boosting Intra-African Trade: The PAPSS provides a secure and efficient channel for processing cross-border payments, which can help boost intra-African trade. By eliminating the need for funds to be routed through correspondent banks outside the continent, the partnership aims to reduce barriers to trade across Africa.
- Commercial Bank Settlement Model: PAPSS introduced the Commercial Bank settlement model, allowing commercial banks to open and fund their own settlement accounts at Afreximbank and manage their liquidity. This offers greater control and flexibility for Standard Bank affiliates in 20 African countries.
- Simplified Payment Process: Historically, cross-border payments in Africa required multiple currency exchanges through correspondent banks, resulting in longer settlement times and higher fees for clients. The partnership with PAPSS aims to simplify the payment process and reduce transactional costs for Standard Bank’s clients.
- Future Implementation: The partnership between Standard Bank and PAPSS will be gradually implemented in collaboration with the central banks of countries where Standard Bank operates. The service is planned to be available from January 2024, and customers will be informed as soon as it becomes available in their respective countries.