Pesalink, PAPSS deal cuts currency barriers for Kenya cross-border payments

Pesalink CEO, Gituku Kirika and PAPSS CEO, Mike Ogbalu, exchange partnership documents following the signing of the agreement in Nairobi. [Brian Ngugi, Standard]

Kenya's instant payment network, Pesalink, has partnered with the Pan-African Payment and Settlement System (PAPSS) to enable real-time cross-border transactions in local currencies, advancing President William Ruto's push to reduce African trade dependence on the US dollar.

The integration allows instant 24/7 bank-to-bank transfers from PAPSS participants into Kenya's Pesalink network, settling entirely in local currencies and bypassing costly correspondent banking requirements that have traditionally forced African businesses to convert through dollars or euros.

"Kenyan banks will now be able to offer faster, cheaper cross-border payments," said Pesalink CEO Gituku Kirika, adding, "They will be helping their customers grow more regional trading relationships and thrive in a more integrated digital economy."

The partnership connects more than 80 Kenyan banks, fintechs, SACCOs, and mobile money operators on the Pesalink network to over 160 commercial banks and fintechs across PAPSS-participating countries, including Nigeria, Ghana, Zimbabwe, and Zambia.

Cross-border payments remain prohibitively expensive across Africa. The 2023 World Bank Remittance Prices report shows sending money between African countries costs on average 7-8 per cent of the transaction value—above the global average of 6-7 per cent —with settlement taking three to seven business days.

PAPSS, an initiative of the African Export-Import Bank (Afreximbank) in collaboration with the African Union and AfCFTA Secretariat, aims to eliminate these frictions by enabling direct currency exchanges. Afreximbank has estimated the system could save African businesses $5 billion (Sh645 billion) annually in transaction costs if fully implemented.

President Ruto has championed reduced dollar dependency in intra-African trade, arguing at the African Private Sector Dialogue in Nairobi that "our traders face challenges making payments for goods and services between countries due to currency differences. Why are we introducing dollars into our trade?"

The Pesalink integration marks the first time PAPSS has piloted transaction termination with a national private switch in Kenya.

PAPSS CEO Mike Ogbalu III said collaboration with national switches is "essential" for delivering impact, and that the partnership is already driving adoption by opening more channels for local-currency payments.

Pesalink, operated by Integrated Payment Services Limited and owned by the Kenya Bankers Association, has become a central pillar of Kenya's real-time payments infrastructure since its 2015 establishment under the National Payment System Act.

The platform enables individuals, SMEs, and businesses to send money efficiently across borders, supporting regional trade under the African Continental Free Trade Area framework. African Central Banks supervise PAPSS governance and daily operations from its Cairo headquarters.