Ecobank Group and Pan African Payment and Settlement System (PAPPS) have signed a Memorandum of Understanding to facilitate the settlement of cross-border transactions of the group.
The MOU was signed during the opening ceremony of the 30th Afreximbank Annual Meetings in Accra, Ghana.
A statement on Wednesday said the MoU was to facilitate settlement of cross-border transactions of the Ecobank Group, including the transactions of all its subsidiaries, through PAPSS.
It said that PAPSS was established by Afreximbank and the AfCFTA Secretariat.
It said: “The PAPSS is a financial market infrastructure that provides a secure and efficient channel for processing cross-border payments, ensuring speed, affordable cost, and reliability to facilitate intra-African trade.”
The statement said during the ceremony, PAPSS also introduced the Commercial Bank Settlement Model.
The statement explained: “It is a new settlement model which offers the commercial banks a window to open and fund their settlement accounts at Afreximbank and manage their own liquidity according to their banking needs.”
It said by leveraging the capabilities of PAPSS, Ecobank affiliates in 33 countries with over 32 million customers would streamline and expedite the transfer of funds while ensuring transparency and compliance under the regulator’s supervision.
The statement said in addition, the partnership aligned with the African Union’s vision of promoting intra-African trade and economic integration through enhanced financial connectivity.
It added: “By leveraging their combined expertise, Ecobank and PAPSS are poised to contribute to the growth and development of the African economy.”
The statement quoted Jeremy Awori, Chief Executive Officer, Ecobank Group, as saying: “Partnerships such as the one we have signed on PAPSS are essential for the delivery and success of the AfCFTA.”
Awori said the partnership with PAPSS was also for the financial integration and economic development of the African continent.
He added: “We are committed to the success of PAPSS and are pleased to bring on board our payments and collections expertise from our African coverage of 33 markets.
“This partnership ensures that all partner banks and PAPSS can expand their reach rapidly and enable greater and wider intra-African trade.
“Today, we begin to change and rewrite the narrative of low intra-African trade by removing the barrier to efficient and instant payments and collections in African currencies.”
Mike Ogbalu III, Chief Executive Officer, PAPSS, was quoted as saying: “Having the cooperation of Ecobank Group, one of the major banks in Africa, is a huge honour.
“But more importantly, it shows that PAPSS is the payment system that will transform the way that people in Africa conduct cross-border transactions.
“To this end, I appreciate the bank’s management for having faith in PAPSS.”
The statement said the MoU would be put into effect gradually in partnership with the Central Banks in the countries where Ecobank Group operates.
It said customers in Africa would be informed through the usual channels of communications as soon as the service becomes available in their countries.
It said: “The PAPSS and Ecobank Group will be working towards making this service available as from January 2024.”
