KCB signs African cross-border payment deal to support customers

KCB Group CEO Paul Russo. The bank is the first in East Africa to onboard the Pan-African Payment and Settlement System. [KCB]

It provides an alternative to current high-cost and lengthy correspondent banking relationships to facilitate trade and other economic activities among African countries through a simple, low-cost risk-controlled payment clearing and settlement system.

"As a Pan-African banking institution, it is our desire to play a bigger role in facilitating trade across Africa and beyond. With such partnerships, we shall be able to settle our own transactions including those for all its subsidiaries as well as for other commercial banks without many hurdles." Russo said.

The platform will deliver multiple advantages and efficiencies to intra-African trade payments that include a reduction in the duration and time variability of cross-border payments across Africa, support real-time payments, decrease the liquidity requirements of commercial banks for cross-border payments, remove transaction value limits, enable commercial banks to set the applicable exchange rates and strengthen oversight of cross-border payment systems by Central Banks.

The Pan-African Payment and Settlement System network currently consists of at least 8 Central Banks, 28 commercial banks, and six switches. It has successfully been piloted in the six countries of the West African Monetary Zone and is expected to expand into the five regions of Africa before the end of 2023. Additionally, all African Central Banks are expected to sign up by the end of 2024 while all commercial banks by the end of 2025.