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FirstBank Nigeria is positioning itself more deeply within Africa’s emerging cross-border payments infrastructure as financial institutions compete to capture a larger role in the continent’s rapidly evolving payment ecosystem.
The development comes as banks and financial technology companies increasingly look beyond domestic transactions toward systems capable of moving money across African borders faster, more cheaply and in local currencies.
At the centre of this shift is the Pan-African Payment and Settlement System (PAPSS), a real-time financial market infrastructure developed by Afreximbank in partnership with the African Continental Free Trade Area (AfCFTA). The system was officially launched in January 2022.
PAPSS Targets Africa’s Payment Bottleneck
PAPSS was created to address one of the longstanding obstacles to greater intra-African trade: the difficulty and cost of making cross-border payments.
The platform enables payments between participating African countries in local currencies, reducing the need for businesses to route transactions through multiple correspondent banks or convert currencies through the US dollar.
Payments can be completed within minutes and operate around the clock, while transaction fees are capped at $16, according to the report. By reducing intermediary layers, PAPSS is designed to lower both the cost and delays associated with conventional cross-border transfers.
FirstBank’s Strategic Position
For FirstBank, participation in PAPSS offers an opportunity to strengthen its role beyond Nigeria’s domestic banking market.
The bank can serve businesses and individuals seeking to conduct transactions across African markets while using an infrastructure specifically designed for intra-African payments.
This is particularly significant as the AfCFTA seeks to increase trade between African countries. A more efficient payment system could help remove one of the practical barriers facing businesses that want to sell, source goods or expand operations across borders.
Banks Want a Bigger Role in Payment Rails
The development also reflects a wider contest over who controls the infrastructure through which African money moves.
Traditional banks are increasingly competing with fintech companies and specialised payment platforms for a role in cross-border transactions. Rather than simply processing payments, these institutions are seeking to become part of the underlying infrastructure that makes those transactions possible.
PAPSS provides an important piece of that infrastructure by connecting banks, payment service providers and other financial intermediaries across participating African markets.
Local Currency Payments Could Change Trade
One of PAPSS’s biggest propositions is the ability to settle transactions in African currencies.
For businesses, this could reduce dependence on foreign currencies for transactions that are entirely African in origin. It could also reduce some of the friction created by multiple currency conversions and correspondent banking arrangements.
The broader objective is to make cross-border African commerce operate more like domestic commerce, where payment infrastructure is faster, more predictable and easier to access.
Infrastructure Still Needs Scale
The existence of a continent-wide payment system, however, does not automatically guarantee widespread adoption.
PAPSS needs banks, payment providers, central banks and businesses across more African markets to connect to the network. It also needs sufficient liquidity and reliable settlement mechanisms to support growing transaction volumes.
That makes the participation of major financial institutions such as FirstBank strategically important. The more banks integrate the system into their services, the easier it becomes for businesses to access cross-border payments without building separate connections for every market.
The Bigger Picture
Africa’s payment infrastructure is entering a period of significant competition.
As intra-African trade expands and digital commerce becomes increasingly cross-border, the companies and institutions controlling the rails that move money could become just as important as those providing consumer-facing payment applications.
For FirstBank, deeper participation in PAPSS offers a chance to strengthen its position in that emerging infrastructure layer.
For Africa, the larger prize is a payment ecosystem capable of supporting AfCFTA’s ambitions by allowing money to move across borders with fewer intermediaries, lower costs and greater reliance on local currencies.
The success of that vision will ultimately depend on adoption at scale and on whether banks such as FirstBank can turn the continent’s new payment rails into services that businesses actually use.
