Pesalink and PAPSS connect Kenya to the pan-African payment system: faster cross-border transfers in local currencies and less reliance on the dollar
Kenya’s instant payments system Pesalink and the pan-African Pan-African Payment and Settlement System (PAPSS) announced on 26 February 2026 a partnership that could visibly change how money moves between African countries. According to the information in the cooperation announcement, the goal is to enable 24-hour cross-border bank transfers that are executed and settled in local currencies, instead of payments routinely being „routed” through correspondent banks and foreign-exchange conversions into the US dollar or other reserve currencies.
For African entrepreneurs, families sending remittances, and companies operating across borders, the message is clear: fewer intermediaries, faster processing, and potentially lower costs. But the real impact will depend on how quickly the network of participants expands, which banks and payment institutions enable access for customers, and how liquidity and exchange rates in local currencies are managed in practice.
What changes concretely: „instant” cross-border payment from an African country directly into Kenya
Until now, cross-border payments within Africa in many cases meant multiple steps: an instruction in the local currency, then conversion into a „hard” currency, correspondent banking, and a series of checks and fees before the recipient in another country even sees the money. In such a model, execution time is often measured in days, and the total cost frequently includes multiple layers of fees and less favorable exchange rates.
Under the new agreement, Pesalink becomes the
Technical Connectivity Provider for PAPSS, which in practice means that PAPSS participants can connect directly to banks and other financial institutions in Kenya that are already part of the Pesalink network. According to the partnership announcement, this involves
more than 80 participants in the Pesalink network (banks, fintech companies, SACCOs and telecoms) who, through this link, could open up toward
more than 160 banks and fintechs included in PAPSS. For users, this should mean that a cross-border payment from a country that is in the PAPSS network can reach an account in Kenya — or the relevant channels into which banking systems and payment service providers are integrated — without the usual „detour” via reserve currencies.
It is important to emphasize that at this stage the focus is mainly on
connecting networks and infrastructure. End users will not necessarily see a completely new app; a more realistic scenario is that banks and service providers gradually enable the cross-border payment option via PAPSS within existing channels (mobile and online banking, business portals, and other integrations).
PAPSS: the idea is that money stays „in Africa” and travels in local currencies
PAPSS was conceived as a financial market infrastructure that enables cross-border payments in African currencies, with the intention of reducing the need to pay via third currencies and correspondent banks. The system was publicly presented in early 2022, as part of a broader effort to facilitate trade within the African Continental Free Trade Area (AfCFTA). The system is connected to African central banks and foresees processes that combine fast transaction authorization and subsequent settlement between participants.
According to the technical description of PAPSS, the process takes place through three core steps:
instant payment,
pre-funding (prior securing of funds) and
net settlement. In the instant payment phase, the user initiates payment in their local currency, the instruction is sent to PAPSS, the system performs the required checks and forwards the instruction to the recipient’s bank, and the recipient receives funds in their local currency. PAPSS states that compliance and validation checks are performed within the system and that payments can be processed
near real time — within a timeframe that in publicly available descriptions is stated as up to around 120 seconds.
On the other hand, to sustain such speed without increasing risk, PAPSS relies on a prior-funding model: participants must have agreed pre-funded positions, and settlement at the system level is carried out through daily net settlement. In technical descriptions, PAPSS states that net positions between central banks are calculated and settled within 24 hours, with a coordinated daily settlement point.
This design tries to reconcile two things that in classic cross-border models often collide: speed and security. At the same time, it means that in the background there must be a robust framework for managing liquidity, limits and risk, which is one of the reasons PAPSS relies on cooperation with regulators and central banks.
Pesalink: a domestic „fast rail” that now gets a cross-border connector
Pesalink is positioned in Kenya as an open, interoperable instant payments network that connects various „stores of value” — bank accounts, mobile money, SACCOs and fintech wallets — through the channels of banks and partners. According to official information on Pesalink’s website, the network is operationally run by Integrated Payment Services Limited (IPSL), and owned by the Kenya Bankers Association (KBA). Pesalink is designed so that participants on the network can communicate with each other regardless of which platform they are on, which is also one of the key reasons why in the domestic context it is often described as an „open” network.
For users in Kenya, this is already a familiar model: payments are initiated through mobile or online banking, USSD or other bank channels, and transactions are executed 24/7. Official FAQs also state a threshold amount up to which it is possible to send funds through the network (up to 999,999 Kenyan shillings per transaction, depending on the bank’s and channel’s rules). In its publicly published statistics, Pesalink also cites the scale of the network — dozens of connected financial institutions — and growth in the value and volume of interbank transactions in the domestic market.
That is precisely why the connection with PAPSS is significant: instead of building cross-border payments „from scratch”, the new cooperation uses existing domestic infrastructure and its interoperability as a foundation for entry into a wider pan-African network. In practice, this could accelerate adoption, because banks that are already technically and operationally integrated with Pesalink get a clearer path toward cross-border flows through PAPSS.
Why the topic matters: expensive transfers, slow settlement and the „price of the dollar” in regional trade
For years Africa has faced a paradox: although geographically and economically it has a strong interest in regional trade, financial infrastructure often does not match that potential. According to Afreximbank’s publicly available statements in the context of expanding PAPSS, the share of intra-African trade has long been described as relatively low (one announcement cites a figure of 16 percent), and one practical reason the business community often highlights is the cost and uncertainty of cross-border collection.
On the other hand, remittances and small cross-border payments are part of the daily reality for millions of people. The World Bank, through the Remittance Prices Worldwide project, tracks the costs of sending remittances by corridors and states that the global average cost of sending remittances is about 6.49 percent of the amount. In many corridors to Sub-Saharan Africa costs are noticeably higher, and international reports further emphasize that the region is among the most expensive in the world for sending relatively small amounts. In that context, any attempt to reduce the number of intermediaries and speed up settlement has a direct social and economic effect: fewer fees „eaten up”, faster access to money, and better predictability for households and small businesses.
The Pesalink–PAPSS cooperation announcements explicitly start from this problem. They state that cross-border payments for many African companies are still expensive and slow, with estimates that the cost of sending money across borders often ranges around 7–8 percent of the value and that settlement can take from three to seven business days. Such figures vary by corridor and service provider, but the overall direction is consistent: a fragmented system and multiple conversions raise the price, and processing time constrains business.
What the partnership can bring to business: faster payment, fewer FX steps, easier reconciliation
If the mechanism truly expands to a large number of participants, the biggest change could happen in the „middle of the market” — among small and medium-sized businesses, exporters, importers and service providers that do not have sophisticated treasury departments, but must collect and pay across borders. In the classic model, even the smallest transaction can entail costs that are relatively high compared to the value of the goods or services, and reconciliation (reconciliation) becomes complex due to multiple intermediaries and differences in value dates.
In the model PAPSS describes, the instruction goes in the local currency, the recipient receives local currency, and the system takes over part of the complexity that was previously distributed between correspondent banks and FX intermediaries. This is especially relevant for markets where a lack of foreign-currency liquidity is still felt or where conversion into reserve currencies is expensive. Afreximbank and PAPSS emphasize exactly that goal in their public materials: reducing pressure on foreign-exchange reserves and facilitating flows between African currencies.
For Kenya, an additional element is the fact that Pesalink is not only a banking „switch”, but an interoperable network in which SACCOs, fintechs and, according to publicly available partner lists, other actors in the payment ecosystem also participate. If the cross-border connector in practice opens up toward broader categories of participants — depending on regulatory rules and status in individual countries — that can expand the availability of cross-border payment beyond traditional models.
Examples where the change can be felt the fastest
- Trade and procurement: paying suppliers in another African country without multiple banking intermediaries, with faster confirmation of receipt.
- Remittances and family support: sending smaller amounts to relatives or students in Kenya with fewer fees and faster access to funds.
- Digital services: collecting payment for digital services and freelance work within the continent, where bank transfers are often too slow for the dynamics of the online market.
- Tourism and travel: payments related to travel and accommodation, where transaction speed and predictability reduce the need for cash.
Technology and politics behind the scenes: interoperability, standards and the question of trust
The success of such initiatives does not depend only on technology. Interoperability requires aligned messaging standards, reliable identifiers, stable risk-management models, and clear rules for transaction reversals, complaints and disputes. In its technical materials, PAPSS highlights that compliance and validation checks are carried out within the system, which is an answer to one of the biggest challenges of cross-border payments: how to speed up transfers without compromises in AML/CFT standards and sanctions screening.
On the other hand, the pre-funding model and daily net settlement mean that participants — banks and licensed service providers — must actively manage liquidity. This is often invisible to the end user, but it is crucial for stability: if the system wants to deliver an „instant” payment experience, in the background there must be a guarantee that the money will truly be settled. This also explains why PAPSS positions itself as an infrastructure that operates in cooperation with central banks.
In that context, the development of additional tools around PAPSS is also interesting. In 2025, Afreximbank communicated the initiative of the so-called African Currency Marketplace, envisioned as a solution for direct exchange of African currencies without going through „hard” currencies. If such mechanisms expand, they could mitigate one of the biggest practical problems of local-currency payments: a lack of liquidity in certain currencies and unfavorable exchange rates in small markets.
What is still unclear and where the potential constraints are
Although the partnership carries an ambitious message, a number of details will only be seen in operational implementation. First, „coverage” depends on how many countries, central banks and commercial banks are already included in PAPSS, and in which corridors the system is fully functional. Second, availability to users will depend on how individual banks in Kenya and beyond implement user flows in apps and business channels, as well as what limits they set for specific transaction types.
Third, exchange-rate dynamics remain a sensitive issue. Although the intention is to reduce reliance on the dollar, conversions between local currencies still require a market mechanism and transparent rate formation. PAPSS and Afreximbank promote models that seek to solve that part within African infrastructure, but in practice users will compare the final amount the recipient receives with market alternatives — from classic bank transfers to specialized fintech solutions.
Finally, the speed of expansion also depends on market trust. Banks and regulators must be confident that the system can handle growing volumes without increasing operational and reputational risks. This particularly relates to consumer protection and complaint-resolution mechanisms in a cross-border environment, where rules can differ.
Broader context: competing models and the „race” to modernize payments
The Pesalink–PAPSS partnership comes at a time when the transformation of cross-border payments is accelerating globally. Traditional correspondent-banking-based infrastructure is increasingly facing pressure: users expect speed similar to domestic instant payments, and costs and complexity are becoming harder to justify in the digital economy. In Africa, this pressure is further amplified because the continent has a large number of currencies, relatively limited mutual banking connectivity, and often lower availability of reserve currencies.
In such an environment, PAPSS positions itself as a „continental response” that combines a regulatory framework and a technological platform. Pesalink, on the other hand, brings experience of domestic interoperability in a country that already has a strong digital financial culture and a large share of transactions through mobile channels. That is why this cooperation is also viewed as a test: can the model of instant domestic payment be translated into the cross-border space without losing control over risks.
For users and the market in Kenya, the key message in the coming months will be very practical: which banks and payment institutions enable cross-border transfers through PAPSS, in which countries, under which conditions and with what fees. If promises of lower costs and faster settlement are confirmed in broad use, this connector could become one of the more visible steps toward a more integrated African financial space — one in which payment within the continent is not treated as an „international exception”, but as a routine, fast transaction.
Sources:- Finextra – announcement of the Pesalink–PAPSS partnership, including Pesalink’s role as „Technical Connectivity Provider” and indicative data on the participant network (link)
- Devdiscourse – report on the agreement and the goal of 24/7 cross-border payments with settlement in local currencies (link)
- PAPSS – official description of how the system works (instant payments, pre-funding and net settlement) (link)
- Pesalink – official FAQ on the network, ownership (IPSL/KBA) and interoperability (link)
- Pesalink – publicly available statistics and indicators of network and transaction growth (link)
- World Bank (Remittance Prices Worldwide) – data on remittance sending costs and the global average (link)
- Afreximbank (press release) – context of PAPSS expansion and statements on the system’s role in strengthening intra-African trade (link)
- UN DESA – data context on trends in remittance costs to Sub-Saharan Africa in 2025 (link)
- Afreximbank (press release) – announcement of the African Currency Marketplace as a mechanism for direct exchange of African currencies (link)
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