The African Export-Import Bank (Afreximbank) is in talks with Egyptian authorities to integrate InstaPay, a domestic instant payment service, into the Pan-African Payment and Settlement System (PAPSS). This integration aims to interconnect Egyptian banks with the PAPSS, enabling seamless cross-border transactions within Africa. According to Mike Ogbalu, CEO of PAPSS, the integration is expected to be completed in the first quarter of next year.
The PAPSS platform allows for cross-border payments between African countries in local currencies, reducing the need for foreign exchange and lowering transaction costs. Egypt joined PAPSS in 2024, but its banks are still in the process of integrating with the system. So far, six major Egyptian banks have begun the integration process. While they have not yet started conducting actual transactions via PAPSS, this is expected to commence by the end of the year.
In comparison to other African countries, banks in Tunisia, Morocco, and Algeria have made significant progress in integrating with PAPSS. Four to five banks in Tunisia, five in Morocco, and two in Algeria are already fully integrated with the system, enabling them to conduct direct transactions. However, Libya has not yet joined the PAPSS.
The integration of InstaPay into PAPSS is expected to boost Egypt's trade with other African countries by reducing payment costs and processing times. According to the Central Bank of Egypt, PAPSS could increase trade between Egypt and other African nations, strengthen financial cooperation, and alleviate pressure on foreign exchange availability.
InstaPay, regulated by the Central Bank of Egypt, has made significant strides in the Egyptian market, with 22 million customers and transactions worth 4,330 billion Egyptian pounds. The service has gained popularity since its inception, providing a convenient and efficient means of conducting transactions.
Regarding data transparency and publication, Mike Ogbalu stated that releasing transaction data requires approval from relevant governance bodies and central banks. Each central bank has a comprehensive view of financial flows within its market, but public disclosure requires official consent. He expects all necessary data to be officially published by January.
The partnership between Afreximbank and Egypt aims to promote financial integration and facilitate trade within Africa. By streamlining cross-border transactions, PAPSS can help increase economic cooperation and reduce reliance on foreign currencies. The successful integration of InstaPay into PAPSS can serve as a model for other African countries to follow.
Key points
- Integration of InstaPay into PAPSS to be completed in Q1 next year
- Six major Egyptian banks have begun integrating with PAPSS
- PAPSS can increase trade between Egypt and other African countries, reducing payment costs and processing times
