GLOBAL PAYMENTS KNOWLEDGEISO 20022 / SWIFT / SEPA / MT / MX
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PAPSS — Pan-African Payment and Settlement System

An intra-African trade payment where the buyer pays in their own local currency and the supplier is paid in theirs, routed local bank to central bank to PAPSS to central bank to local bank, then netted and settled daily.

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Contributor Shubham Mathure

STEP 1 / 9MESSAGE

Asha Traders instructs its local bank to pay the supplier

Asha Traders (buyer) → Bank Alfa (buyer's local bank)

Asha Traders owes a supplier in another African country the equivalent of USD 20,000.00 for imported goods, and instructs Bank Alfa to pay in Asha's own local currency (local currency A) — no need to first buy a hard currency such as US dollars.

Step 1 of 9: Asha Traders instructs its local bank to pay the supplier

  1. 01Message
    Asha Traders instructs its local bank to pay the supplierAsha Traders (buyer) → Bank Alfa (buyer's local bank)
  2. 02Message
    Bank Alfa forwards the instruction to Central Bank ABank Alfa (buyer's local bank) → Central Bank A (buyer's central bank)
  3. 03Message
    Central Bank A sends the instruction to PAPSSCentral Bank A (buyer's central bank) → PAPSS (Pan-African Payment and Settlement System)
  4. 04Processing
    PAPSS validates the instructionPAPSS (Pan-African Payment and Settlement System)
  5. 05Message
    PAPSS forwards the instruction to Central Bank BPAPSS (Pan-African Payment and Settlement System) → Central Bank B (supplier's central bank)
  6. 06Message
    Central Bank B routes the instruction to NordbankCentral Bank B (supplier's central bank) → Nordbank (supplier's local bank)
  7. 07Posting
    Nordbank pays the supplier in the beneficiary's local currencyNordbank (supplier's local bank)
  8. 08Clearing obligation
    PAPSS nets the day's cross-currency balancesPAPSS (Pan-African Payment and Settlement System)
  9. 09Settlement
    The netted balances settle among the central banksCentral Bank A (buyer's central bank) → Central Bank B (supplier's central bank)
MESSAGECLEARING OBLIGATIONSETTLEMENTPOSTING
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  1. 01Message
    Asha Traders instructs its local bank to pay the supplierAsha Traders (buyer) → Bank Alfa (buyer's local bank)

    Asha Traders owes a supplier in another African country the equivalent of USD 20,000.00 for imported goods, and instructs Bank Alfa to pay in Asha's own local currency (local currency A) — no need to first buy a hard currency such as US dollars.

  2. 02Message
    Bank Alfa forwards the instruction to Central Bank ABank Alfa (buyer's local bank) → Central Bank A (buyer's central bank)

    The buyer's local bank passes the validated instruction up to its own central bank, Central Bank A, which is the participant that connects the country's banks into PAPSS.

  3. 03Message
    Central Bank A sends the instruction to PAPSSCentral Bank A (buyer's central bank) → PAPSS (Pan-African Payment and Settlement System)

    Central Bank A hands the cross-border instruction to PAPSS, the shared switch that links the participating African central banks so a payment can cross a border without leaving the continent's own systems.

  4. 04Processing
    PAPSS validates the instructionPAPSS (Pan-African Payment and Settlement System)

    PAPSS checks the instruction is well-formed and routable and runs compliance screening on the parties before it forwards anything — a shared control point sitting between the two central banks.

    Screening checkpoint: PAPSS instruction screening — Party names and details are screened against sanctions lists at the switch, in addition to the checks each bank and central bank runs; a potential match holds the payment for review before it is forwarded.

  5. 05Message
    PAPSS forwards the instruction to Central Bank BPAPSS (Pan-African Payment and Settlement System) → Central Bank B (supplier's central bank)

    Once validated, PAPSS forwards the instruction to the supplier's central bank, Central Bank B, which will route it down to the supplier's local bank — the message crosses the border, the money does not yet.

  6. 06Message
    Central Bank B routes the instruction to NordbankCentral Bank B (supplier's central bank) → Nordbank (supplier's local bank)

    The supplier's central bank passes the instruction to the supplier's own local bank, Nordbank, which holds the supplier's account and will make the actual payment.

  7. 07Posting
    Nordbank pays the supplier in the beneficiary's local currencyNordbank (supplier's local bank)

    Nordbank credits the supplier in the supplier's own local currency (local currency B) — the amount matching the agreed value of the trade — so the supplier never has to touch the buyer's currency or a hard-currency intermediary.

    • CR Supplier's account at Nordbank — local currency B (value of USD 20,000.00)
  8. 08Clearing obligation
    PAPSS nets the day's cross-currency balancesPAPSS (Pan-African Payment and Settlement System)

    At the end of the day PAPSS adds up all the instructions between the participating central banks and nets them into a single amount owed each way per currency, so many payments become one balance per pair rather than a settlement per payment.

    Netting produces who-owes-whom across the participating African currencies. The central banks do not have their money yet — that happens at settlement.

  9. 09Settlement
    The netted balances settle among the central banksCentral Bank A (buyer's central bank) → Central Bank B (supplier's central bank)

    PAPSS settles the netted balances among the participating central banks on a daily basis, typically before midnight, so the cross-currency positions built up during the day are cleared to zero each day among the central banks themselves.

    • DR Central Bank A net position at PAPSS — net of local currency A (value of USD 20,000.00)
    • CR Central Bank B net position at PAPSS — net of local currency B (value of USD 20,000.00)

What this simplifies: One buyer, one supplier, and a single daily netting and settlement cycle across two central banks. Real PAPSS handles many currencies and participants at once, and the exact netting and settlement timing and liquidity arrangements vary.

LEARN THE CONCEPTS BEHIND THIS FLOW

Sources for this flow2
  1. Official requirement

    PAPSS (Pan-African Payment and Settlement System) ↗ — Pan-African Payment and Settlement System (PAPSS) / Afreximbank

    Describes PAPSS, the Pan-African Payment and Settlement System launched on 13 January 2022 by the African Union and the African Export-Import Bank (Afreximbank) to support intra-African trade under the AfCFTA: a payment instruction flows from the local bank via its central bank to PAPSS, which routes it to the beneficiarys central bank and local bank, paying the beneficiary in local currency; PAPSS nets and settles the balances among the African currencies on a daily basis. · Checked 2026-07-14

    PAPSS lets parties transact in their own African currencies; the days cross-currency balances are netted and settled among participating central banks daily.

  2. Simplified educational illustration

    Payments Signal editorial teaching models — Payments Signal

    This site's own simplified teaching models. · Checked 2026-07-12

    What this simplifies: A single corridor with one payment, generic local-currency placeholders, and one daily netting and settlement cycle; the working-capital, liquidity, and messaging details among many central banks and banks are omitted.

    Used wherever diagrams, scenarios, figures, or example values are didactic constructions rather than sourced facts; every such use carries a simplifications disclosure. All people, companies, banks, and list entries in examples are fictional.