Ethiopia Joins PAPSS in Major Step Towards Pan-African Payments

Ethiopia has joined the Pan-African Payment and Settlement System (PAPSS), becoming the 31st member country of the continental payment network in a move expected to deepen the country’s integration into Africa’s cross-border financial infrastructure.

The country signed PAPSS’s bylaws about a month ago, formally advancing its participation in a system designed to allow businesses to make cross-border payments that are settled in African currencies rather than relying on third-country currencies such as the US dollar or euro.

Mike Ogbalu III, chief executive of PAPSS, who is in Addis Ababa attending the Ethiopia Finance Forum, described Ethiopia’s onboarding as more than a development in payment infrastructure, linking it to the country’s history of political independence and Africa’s efforts to strengthen its financial autonomy.

“Ethiopia’s onboarding to the Pan-African Payment & Settlement System — PAPSS — is more than just a financial milestone; it is a declaration of economic liberation,” Ogbalu said in a social media post accompanying a photograph taken beside the Lion of Judah statue in Addis Ababa.

Ogbalu said Africa’s trade had for generations relied on foreign intermediaries, third-party currencies and costly cross-border payment arrangements. PAPSS, he said, could help remove some of those barriers by allowing African countries to transact more directly with one another.

“PAPSS changes everything,” he said. “By enabling real-time, instant payments in local African currencies across borders, PAPSS dismantles those centuries-old barriers.”

Four Ethiopian banks have begun the regulatory process to join the PAPSS network, awaiting no-objection letters from the National Bank of Ethiopia. Ogbalu told Shega that he expects the approvals within weeks.

The banks will still have to complete PAPSS’s compliance requirements before they can become operational participants in the network. Ogbalu cautioned that some banks may not meet the system’s requirements, according to Shega.

PAPSS is targeting connections with half of Ethiopia’s banks by March 2027, as reported by Shega, signalling an effort to move quickly from country-level membership to wider adoption by the Ethiopian banking industry.

The onboarding process had taken time partly because of concerns from the Ethiopian government over the potential exposure of financial data to other PAPSS member countries. Ogbalu told Shega that PAPSS had worked to address those concerns, arguing that transaction data would not belong to other participating countries.

PAPSS was established by Afreximbank in partnership with the African Union to facilitate cross-border payments and settlement in African currencies. Its infrastructure is intended to reduce the need for African businesses to route transactions through foreign currencies and financial intermediaries.

Transaction volumes on PAPSS rose by about 1,000 percent between 2025 and 2026, while transaction values increased by roughly 120 percent. The system is now moving beyond network expansion to focus on wider adoption and higher transaction volumes.

Source: FSX Business News