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•Ogbalu, PAPSS CEO
The Pan-African Payment and Settlement System (PAPSS) is positioning Nigeria and its vibrant fintech ecosystem at the centre of efforts to deepen cross-border trade and financial integration across Africa.
PAPSS, Chief Executive Officer, Mike Ogbalu III, in a recent interface with journalists, said the system is helping businesses transact in local currencies, reducing reliance on hard currencies and bringing informal trade into the formal economy.
In this interview, he discusses PAPSS’ growth, challenges, fraud controls, currency exchange and the ambition for full continental coverage.
How is PAPSS helping small businesses and informal traders?
It is extremely important. One of the interesting things we have discovered from the data is that PAPSS is gradually capturing what we call informal trade.
A large amount of African trade does not necessarily appear in official trade statistics because many small businesses operate outside the formal banking system.
For example, a trader from Nigeria may travel to another West African country with cash, exchange the money at the border and then buy goods.
With PAPSS, that trader can go to the seller, make the payment electronically and have the seller receive the money almost immediately.
That changes the economics of the transaction.
Previously, a supplier could receive a payment and then spend two or three days confirming that the money had arrived before releasing goods. Those two or three days represent lost business time.
With instant payments, the supplier receives confirmation immediately and can release the goods.
For small businesses, time is money. The faster they can pay, receive goods and sell those goods, the faster they can turn over their inventory.
This is why convenience is becoming one of the most important factors driving the use of PAPSS.
What is the ultimate goal of PAPSS?
The ultimate goal is to connect Africans. Africa has about 1.4 billion people. Yet many businesses still think of their market as only the population of their individual country.
If you create a solution for Nigeria alone, you have a large market. But if that solution can work across Africa, the opportunity becomes much bigger.
PAPSS is trying to provide the infrastructure that makes that possible. Our vision is an Africa where a business can sell goods in another African country, receive payment in its local currency and settle the transaction quickly without unnecessary dependence on external currencies or financial intermediaries.
We want a Nigerian business to be able to trade with Ghana, Rwanda, Kenya, Cameroon, Egypt, South Africa and other African markets as easily as it trades within Nigeria. That is why PAPSS is important.
The African Continental Free Trade Area provides the framework for a single African market. PAPSS provides a critical part of the financial infrastructure needed to make that market work.
We have already made significant progress in a relatively short period. But our work is not finished.
The next stage is about deepening adoption, bringing more banks and fintechs into the system, connecting more domestic payment schemes, supporting SMEs and making the service more visible to ordinary Africans.
The goal is not simply to build another payment platform. The goal is to make it easier for Africans to trade with Africans.
That is the real importance of PAPSS.
What are you seeing from Nigeria’s transactions with other African countries?
Nigeria is already showing the importance of cross-border payment corridors.
We have seen significant transactions between Nigeria and Ghana. Interestingly, transactions between Nigeria and Rwanda have also grown strongly and, at certain points, have approached or exceeded the Nigeria-Ghana corridor.
We are also seeing significant transactions between Nigeria and Kenya. But what has become particularly important is the demand for transactions between Nigeria and its immediate West African neighbours.
Banks have told us that unless they can transact easily between Nigeria and countries such as Cameroon, Niger and Benin Republic, the system has not fully solved their problem.
This demonstrates that payment systems must follow the actual patterns of trade.
We are seeing a significant flow of Nigerian goods into West African markets. Traders who previously carried cash across borders are increasingly using electronic payments.
That is a very important development because it improves security, reduces the risks associated with carrying cash and creates a digital record of transactions.
How many countries are currently connected to PAPSS, and when will you achieve full continental coverage?
PAPSS is expanding rapidly. At the stage covered by this strategy, our target is to close the year with about 38 countries. Our immediate objective is to achieve coverage of about 80 per cent of the continent, including all the major economies. Over the five-year strategic period, our ambition is full continental coverage.
South Africa remains one of the major economies we are engaging with and discussions have been positive. We hope it will join the network.
We have also made progress in Central Africa. The recent participation of the Bank of Central African States, or BEAC, is particularly significant because BEAC serves six Central African Economic and Monetary Community (CEMAC) countries.
Its participation gives PAPSS an important gateway into Central Africa and Francophone markets.
The important point is that we are not just trying to put countries on a list. We want to deepen usage within those countries.
What role has Nigeria played in the development of PAPSS?
Nigeria has been extremely important to the PAPSS journey. Nigeria was among the first countries to come together in support of PAPSS, and it was the first country to chair the Permanent Council of PAPSS.
Nigeria continues to provide leadership within the system. So, when we talk about the development of PAPSS, we must acknowledge the role Nigeria has played.
I say this not simply because I am Nigerian. I grew up in Egypt, but I believe Nigeria has to rise and take its place in Africa.
Nigeria has a very important role to play in shaping Africa’s economic future. The country has one of the continent’s largest economies, a sophisticated financial sector and a very strong technology and fintech ecosystem.
In the payments industry particularly, Nigeria has developed innovations that have not received enough recognition.
One of the things PAPSS is doing is connecting those innovations with what is happening in other African markets.
The objective is to create a payment ecosystem that allows money to move seamlessly from one African country to another.
Why was PAPSS created in the first place?
The prosperity of African countries is closely linked to the amount of trade they conduct with one another and with the rest of the world.
Trade creates economic value. A farmer produces food, a manufacturer processes goods, a technology company creates a service and businesses sell those products and services to consumers. At every stage, there must be a payment.
Therefore, there is no trade without payment. Africa has 54 countries, different economic policies, different regulations and many currencies. Historically, when a Nigerian business wants to trade with another African country, the payment may have to pass through a foreign currency and an international financial institution.
That creates additional costs, delays and risks.
At the same time, Africa is trying to build a single market through the African Continental Free Trade Area. It does not make much sense to have a continental trade agreement encouraging Africans to trade with one another while the payment infrastructure remains heavily dependent on systems outside the continent.
That is why PAPSS was created.
PAPSS provides the financial infrastructure that allows African businesses and individuals to make and receive cross-border payments using local currencies.
A Nigerian business can initiate a transaction in naira, while the beneficiary in another African country can receive the equivalent amount in his or her local currency.
That is a major change in the way African trade can be conducted.
What makes PAPSS different from traditional international payment systems?
PAPSS is designed around Africa’s specific circumstances. We are not simply trying to copy an existing global payment system. We are building an ecosystem that connects the payment systems that already exist in African countries.
Payment is not only about technology. It is also about trust. You cannot build a continental payment system by relying only on technology. You need strong governance, central-bank oversight, participating banks, security systems and mechanisms for resolving disputes.
PAPSS therefore combines technology with governance.
The Payment Systems Oversight Committee includes directors responsible for payments at participating central banks. They have direct oversight of the system.
There is also a Management Board with representatives from different parts of Africa.
The objective is to make sure that PAPSS reflects African priorities while meeting international standards.
Why is adoption uneven across African countries?
There are several reasons. The first is regulatory support. In countries where the central bank actively supports PAPSS, adoption tends to be much faster. Central banks have to provide the necessary regulatory approvals for banks and other payment institutions to participate.
The second factor is the strength of the fintech and technology ecosystem. Nigeria is a good example. Once PAPSS becomes available, fintech companies and banks quickly ask how they can connect to it.
The third issue is technology infrastructure.
Some African countries have relatively old banking technology. In some cases, we have had to support the infrastructure required to connect those markets to PAPSS.
There is also the issue of awareness.
A payment system can be excellent, but if businesses and consumers do not know that it exists, they will not use it.
We have to do more in this area, and the media has an important role to play.
Another concern is that some countries fear PAPSS could undermine regional payment systems they have already invested in.
We tell them that PAPSS is not designed to destroy those systems. If a country has a regional payment system that works well for transactions within its region, it should continue using it. PAPSS can then provide the connection for transactions outside that region.
So, PAPSS should be seen as an additional layer that connects existing systems rather than one that replaces them.
How is PAPSS tackling fraud risks associated with digital payments?
Fraud management is a critical part of the system. We have built an artificial intelligence-driven fraud-management system that examines transactions and looks for unusual patterns.
Transactions go through different checks before they are completed.
When a transaction originates in Nigeria, for example, it enters the PAPSS infrastructure, passes through the required checks, reaches the destination country and the beneficiary’s account is credited.
The objective is to make the payment instant without compromising security.
We have, therefore, surrounded the technology with governance, compliance and dispute-resolution mechanisms.
How important is Nigeria’s fintech ecosystem to PAPSS?
Nigeria demonstrates what is possible when banking, technology and innovation come together.
Once a payment service is integrated into a bank’s digital channels, transaction volumes can rise significantly because customers do not have to visit a branch.
We have seen cases where connecting a bank’s digital channels resulted in transaction numbers increasing three or four times almost immediately.
This shows that convenience is a major driver of financial behaviour.
The consumer does not necessarily need extensive training. If the service is simple and secure, people will use it.
That is one of the lessons Nigeria offers the rest of Africa.
What have you learned about financial behaviour across Africa?
One of the biggest lessons is that convenience matters enormously. People want to transact quickly, safely and easily.
We have also learned that payment corridors matter. When two countries have strong trade, payment volumes tend to follow.
Nigeria’s relationships with Ghana, Rwanda, Kenya and other African countries demonstrate this.
We are also learning more about informal trade.
Many transactions that were previously invisible to formal financial systems are now becoming visible through digital payment infrastructure. That gives central banks better information about economic activity.
We are developing our data capabilities so that we can understand these flows better and provide useful information to regulators and the market.
PAPSS has launched the African Currency Marketplace. How does this relate to the proposed Pan-African digital currency?
They are not the same thing. The African Currency Marketplace, or PACM, addresses a specific problem: currency convertibility and liquidity.
PAPSS had already solved part of the payment problem. But we discovered that payments alone were not enough.
A company may receive money in another African country but still have difficulty converting or repatriating that money. That creates what we call trapped capital.
PACM was developed to enable the direct exchange of African currencies without necessarily passing through hard currencies such as the US dollar.
It therefore complements PAPSS rather than replacing the idea of a Pan-African digital currency.
The proposal for a Pan-African digital currency, including stablecoins, remains a broader strategic idea being explored by Afreximbank. Afreximbank President George Elombi raised the issue in October 2025 as part of the bank’s digital transformation agenda.
PACM, on the other hand, is already an operational initiative built around African currency exchange. It was launched by PAPSS and Interstellar in 2025 to address the currency-convertibility problem and reduce the costs associated with using hard currencies for intra-African trade.
What role will cryptocurrency and stablecoins play in Africa’s payments future?
Blockchain and cryptocurrency technologies will play an important role in the future of payments.
Stablecoins, in particular, are here to stay.
Our objective is not to go around Africa creating stablecoins ourselves. There are already companies working in that space.
Our responsibility is to create infrastructure that can bring different forms of money and payment technologies together.
Whether it is traditional fiat money or emerging digital forms of money, we want to be able to support legitimate money flows across African borders.
We are therefore actively studying developments in this area.
What could an African credit rating agency mean for PAPSS and the wider financial system?
I am very excited about the development of an African credit rating agency.
For too long, African institutions have sometimes been assessed primarily through external perspectives that do not always capture the realities of African economies.
An African rating institution can help African institutions tell their stories from an African perspective while still applying credible international standards.
There is also a capital-flow dimension.
A significant amount of African capital and reserves is held outside the continent. Better understanding of African institutions and markets could help encourage more African capital to remain within Africa and finance development.
That would support the broader objective of financial integration.I can also make the headline more newspaper-like and punchier, for example: “PAPSS: Why Nigeria Holds the Key to Africa’s $3trn Trade Market” or “PAPSS: Nigeria Leads Africa’s Shift to Local-Currency Payments.”
