"It will also expedite and enable payments for intra-African trade in African currencies."
The new system allows countries to trade with their own currencies seamlessly.
PAPSS is expected to reduce the costs, and accelerate the settlement and payment of, trade transactions.
African companies and their local banks use correspondent banks - often based outside of Africa - to settle payments between two African currencies in a third, external currency, usually dollars or Euros.
This system has created foreign exchange and liquidity pressures for individual African Central Banks.
By facilitating the settlement of payments, PAPSS aims to support increased African trade under the AfCFTA.
African Central Banks oversee the governance and daily operation of the PAPSS, which is headquartered in Cairo, Egypt.
PAPSS is only an exchange for legal tender, not digital assets like cryptocurrencies or Central Bank Digital Currencies.
Trade practices between African countries have long been subject to the supremacy of the US dollar.
Whether it's Kenyan traders doing business with Djibouti or other intra-continental transactions, the necessity for the US currency often becomes an unavoidable obstacle.
This shilling just like other regional currencies is facing currency pressure against the dollar.
It hit a record low against the dollar yesterday piling further pressure on Kenyans already dealing with a high cost of living crisis that has plunged many into poverty and fuelled political unrest.
The depreciating shilling now threatens to pile fresh pressure on fuel prices, which have stoked public anger.
Central Bank of Kenya (CBK) data shows the shilling exchanged at an average of 140.1206 yesterday, setting up the country for more expensive imports, electricity and debt servicing distress.
The continued weakening of the local currency is expected to push up living costs, hurting households already subjected to high fuel and food prices, experts said.