Kenyan businesses and individuals are set to benefit from significantly cheaper and faster regional trade following a landmark partnership between Pesalink and the Pan-African Payment and Settlement System (PAPSS).
The agreement, signed in Nairobi on 26 February, integrates Kenya’s leading instant payment network with the continent-wide settlement platform. The move is designed to eliminate the long-standing reliance on foreign “reserve” currencies, such as the US dollar, for transactions between African nations.
Under the new framework, more than 80 Kenyan financial institutions—including banks, fintechs, SACCOs, and mobile money operators—will be linked to a network of over 160 commercial banks across Africa. This connectivity allows for instant, 24/7 bank-to-bank transfers that are settled entirely in local currencies.
For decades, cross-border payments within Africa have been notorious for being both slow and expensive. According to the 2023 World Bank Remittance Prices report, sending money across African borders costs an average of 7–8 percent of the total value—higher than the global average. Furthermore, settlements typically take between three and seven business days due to complex correspondent banking requirements.
By acting as a “Technical Connectivity Provider,” Pesalink will allow its participants to bypass these traditional hurdles. The partnership aims to reduce transaction costs and ensure that payments are reflected in the recipient’s account almost immediately.
Mike Ogbalu III, the Chief Executive of PAPSS, described the collaboration as essential for the system’s success. “Pesalink is the first switch we’ve piloted for transaction termination in Kenya, and we are already seeing greater adoption by opening more channels for seamless, local-currency cross-border payments across Africa,” he said.
The initiative is a joint venture between the African Export-Import Bank (Afreximbank), the African Union, and the AfCFTA Secretariat. It forms a critical pillar of the African Continental Free Trade Area’s goal to create a single, integrated digital economy.
Gituku Kirika, the Chief Executive of Pesalink, noted that the partnership would provide Kenyan banks with a competitive edge. “They will be helping their customers grow more regional trading relationships and thrive in a more integrated digital economy,” Mr Kirika stated.
For small and medium-sized enterprises (SMEs) in particular, the ability to settle invoices in Kenyan Shillings while the recipient receives their own local currency is expected to unlock new markets that were previously considered too expensive to service.
Pesalink, which is owned by the Kenya Bankers Association and operated by Integrated Payment Services Limited (IPSL), has already become a central pillar of Kenya’s real-time payment infrastructure.
By linking this domestic strength with the continental reach of PAPSS, the two organisations hope to provide a blueprint for other African nations to follow, ultimately reducing the continent’s dependency on external financial systems and strengthening the value of local currencies.-herald
