Introduction
As we enter Q4 2025, the financial landscape across Africa and Europe is experiencing a significant transformation, thanks to the Pan-African Payment and Settlement System (PAPSS). This revolutionary platform is not only enhancing cross-border trade but also paving the way for seamless financial integration between the two continents. Recent developments, including the launch of the PAPSS African Currency Marketplace (PACM), highlight the system’s growing impact and potential to address longstanding challenges in currency conversion and transaction costs.
Current State & Trends
Breaking News and Developments
The recent launch of the PAPSS African Currency Marketplace (PACM) in July 2025 marks a pivotal moment in addressing Africa’s currency inconvertibility. By partnering with Interstellar, PAPSS has created a platform that facilitates sovereign currency exchange, eliminating the need for hard currencies in intra-African trade. This innovation aims to resolve the estimated $5 billion annual bottleneck caused by currency reliance issues.
The network’s expansion continues with Algeria becoming the 18th country to join PAPSS in August 2025, following Morocco’s accession in July. This growth is crucial for advancing a unified regulatory framework that promotes intra-African trade.
Market Size and Impact
With operations now in 18 African countries and connections to over 150 commercial banks and 14 national switches, PAPSS has significantly increased transaction volumes, exceeding 1000% growth since its integration with digital channels. End users are experiencing up to 27% savings on cross-border transaction costs, a substantial improvement over traditional correspondent banking models.
Google Trends Insights
In September 2025, Google Trends reflects a surge in interest for terms like ‘PAPSS’, ‘African Currency Marketplace’, and ‘cross-border payments Africa’, particularly in regions such as Nigeria, Kenya, South Africa, Morocco, and France. This indicates heightened engagement from both African and European stakeholders.
Technology & Innovation
Leading Platforms and Solutions
PAPSS, developed by Afreximbank in collaboration with the African Union and AfCFTA Secretariat, offers a core platform facilitating real-time, multi-currency settlement for cross-border payments. The PACM platform launched in July 2025 is a cutting-edge digital marketplace for sovereign currency exchange, reducing dependency on hard currencies.
Technical Infrastructure and Adoption
PAPSS’s real-time settlement capabilities enhance liquidity and reduce settlement risk, with 14 national payment switches integrated for seamless interoperability. The system’s API-driven architecture supports rapid integration, making it a valuable asset for banks, fintechs, and corporations across Africa.
Africa-Europe Focus
Cross-Border Payment Opportunities
PAPSS serves as a crucial bridge for Europe-Africa trade, allowing European businesses to settle payments with African partners in local currencies, thereby minimizing FX risks and transaction costs. The PACM’s direct currency exchange feature further streamlines trade settlements and aligns with AfCFTA objectives.
Regional Insights: Botswana and Kenya
In Botswana, as a SADC member, the integration of PAPSS is enhancing trade capabilities with neighboring countries. Kenyan fintechs are leveraging PAPSS APIs to expand remittance and trade payment services, particularly in the Europe-Kenya corridor, capitalizing on the country’s leadership in mobile money adoption.
Regulatory & Business Landscape
Regulatory Changes and Compliance
Recent regulatory updates across Africa and Europe, including the EU’s MiCA, are shaping the operational landscape for PAPSS participants. Compliance with AML, KYC, and data protection standards is mandatory, ensuring secure cross-border transactions.
Business Opportunities
For payment providers, PAPSS APIs offer opportunities to develop new cross-border payment products targeting SMEs and diaspora markets. Strategic partnerships and investments in fintech are further driving growth in the Africa-Europe payment corridor.
Future Outlook
Predictions for the Next 6-12 Months
PAPSS is poised to expand to over 25 African countries by mid-2026, with increasing adoption of the PACM platform expected to drive down FX costs and boost trade. Enhanced integration with mobile money platforms will further extend cross-border payment access to millions of users.
Emerging Opportunities and Challenges
While opportunities abound in expanding trade finance solutions and establishing new remittance corridors, challenges such as regulatory harmonization and cybersecurity risks must be addressed to ensure sustainable growth.
Conclusion
PAPSS, with the introduction of PACM, is at the forefront of revolutionizing cross-border payments and trade between Africa and Europe. By offering a real-time, cost-effective, and compliant payment infrastructure, PAPSS is creating significant opportunities for payment providers, fintechs, and corporates, while advancing financial inclusion and economic integration across both continents.
