Kenyans can now send and receive money across Africa instantly in the local currency. A new partnership between PesaLink and Pan-African Payment and Settlement System (PAPSS) means local banks and mobile money services can facilitate round-the-clock cross-border payments using the Kenyan shilling.
This partnership integrates over 80 Kenyan financial institutions, spanning banks, SACCOs, and various payment service providers that are part of the Pesalink network. They will be able to work with over 160 banks and fintechs across Africa that are part of PAPSS.
Making up a network of over 240 financial institutions, the partnership removes the delays and high costs typical of correspondent banking. The need to route payments through intermediary banks outside Africa and the dependency on non-African currencies are eliminated.
“Settlement shifts from days to seconds. Costs fall for individuals, SMEs, corporates, and regional supply chains,” reads part of the statement on the deal.
PAPSS-Pesalink integration also covers a niche often neglected, as payment service providers focus on remittance inflows traditionally from the Gulf States, North America, and Europe.
In addition, sending money across African borders is traditionally expensive, with fees averaging 7–8% of the total value sent, surpassing the global average of 6–7%.
With data indicating intra-African transfers make up approximately 20% of overall remittances, totaling around US$20 billion in 2023, the new partnership is long overdue.
PAPSS, a platform developed in collaboration with the African Export-Import Bank (Afrexim Bank), enhances one of its objectives: to improve trading under the African Continental Free Trade Area (AfCFTA).
Notably, PesaLink, managed by Integrated Payment Services Limited (IPSL), becomes the first payment switch to partner with PAPSS for terminating cross-border transactions within Kenya.
Its latest partnership follows a separate collaboration between PesaLink, NALA, and Equity Bank, which specifically streamlines digital remittances from outside the African continent.
