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For years, African traders have faced an uphill battle when it comes to making cross-border payments. The process is slow, expensive, and frustratingly complex.
Take, for example, a textile trader in Nairobi who frequently buys fabrics from Ghana. Before they can make a payment, they must convert Kenyan shillings into US dollars and then into Ghanaian cedis.
Each step comes with extra costs, delays, and unpredictable forex rates that eat into their profits.
Or consider a South African working in Nairobi who wants to send money home to his family. They would first have to exchange Kenyan shillings for dollars and then convert them again into South African rands, losing money on every transaction.
These challenges make expanding into new markets difficult for small and medium enterprises (SMEs), which are the backbone of trade in Africa. However, a new solution is changing the game.
How KCB and PAPSS are Fixing the Problem
To eliminate these inefficiencies, KCB has integrated with the Pan-African Payment and Settlement System (PAPSS), a financial infrastructure developed by Afreximbank.
PAPSS allows businesses and individuals to send and receive money in their local currencies, removing the need for costly conversions.
According to Mike Ogbalu, CEO of PAPSS, the system will help "enhance financial connectivity and support the implementation of the AfCFTA", Africa’s free trade agreement aimed at boosting commerce across the continent.
READ: KCB makes history as 1st Kenyan bank to unlock instant cross-border transactions
By joining PAPSS, KCB customers can now:
Make faster cross-border payments, cutting down long transaction delays.
Save on forex conversion fees since payments are settled in local currencies.
Expand into new African markets, unlocking seamless trade opportunities.
Can PAPSS Solve Africa’s Forex Dependency?
One of the biggest challenges Africa faces is its heavy reliance on foreign currencies like the US dollar. Many African countries don’t have enough dollar reserves, leading to frequent forex shortages and unpredictable exchange rates.
According to Lee Kinyanjui, Cabinet Secretary for Investments, Trade & Industry, PAPSS could help reduce Africa’s forex struggles by allowing businesses to trade directly in their currencies, stabilising exchange rates in the process.
What This Means for KCB and Kenya’s Fintech Leadership
With a presence in seven East African countries, KCB is positioning itself at the heart of Africa’s digital banking revolution.
During the launch of KCB’s integration with PAPSS, Group CEO Paul Russo reiterated the bank’s commitment to supporting businesses across the continent:
We want to play a bigger role in catalyzing trade and payments in Africa and beyond, leveraging our digital capabilities and regional footprint. Our entry into PAPSS aligns perfectly with our strategy of supporting economic growth in Kenya and across Africa by facilitating seamless financial transactions.
For Kenyan traders, this could be the start of a new era of seamless, borderless commerce.
Now, they sell to buyers in other African countries, receive payment in Kenyan shillings instantly, and reinvest in their businesses without losing money on forex fees.
For Africans working abroad, sending money home is now simpler and cheaper, a major relief for families relying on remittances.
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