“There are 42 currencies in Africa. We want to make sure that a trader in Ghana can transfer Ghanaian cedi to a counterpart in Kenya who will receive Kenyan shillings,” Mr. Mene, the Secretary-General, African Continental Free Trade Area (AfCFTA) Agreement Secretariat told Africa Renewal in an interview”.
With PAPSS, Africans will no longer need to convert local currencies into hard currencies which then entailed the funds leaving Africa to be converted before being sent back again to the beneficiary bank – adding days to the transaction time.
With PAPSS, horrible experiences like, ” I paid an extra $165 ( $30 as transfer fee, $35 as SWIFT charges and another $100 bank charges ) on top of a $10,000 bank transfer to the seller on orders within Africa is over.
With PAPSS, ‘ a cumbersome and time-consuming process “costs us [Africans] about $5 billion in [money transfer] charges each year,” according to Benedict Oramah, President of the African Export-Import Bank, (Afreximbank), in an interview with Africa Renewal” is coming to an end.
How PAPSS works
Sending money using the PAPSS is a five-step process:
The first step is when an individual issues a payment instruction to their local bank or payment service provider.
Second, the bank or the payment service provider sends the instructions to PAPSS.
Third, PAPSS validates the payment instruction.
Fourth, upon successful validation, PAPSS will forward the instruction to the beneficiary’s bank or payment service provider.
Lastly, the bank or payment service provide pays the transferred funds, in local currency, to the beneficiary.
In announcing the rollout of PAPSS, Afreximbank says that by “simplifying cross-border transactions and reducing the dependency on hard currencies for these transactions, PAPSS is set to boost intra-African trade significantly beside leading to increase in value addition to products, jobs creation and more earnings for traders.
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