Nigeria’s cross-border payment activity on the Pan-African Payment and Settlement System (PAPSS) fell sharply in the first half of 2025, according to data released by the Central Bank of Nigeria (CBN).
The value of transactions processed through the platform dropped by 53 per cent to ₦5.6 billion, raising concerns about the pace of intra-African trade settlement and the utilisation of the continent’s flagship payment infrastructure.
The decline was captured in the CBN’s Financial Stability Report for the period ending June 30, 2025.
The report showed that Nigerian participants settled 3,246 transactions through PAPSS in the first half of the year.
This figure represents a 29 per cent drop from the 4,600 transactions recorded in the preceding six months, signalling a significant pullback by Nigerian users from the continent-wide payment system.
The transaction value also plunged from ₦11.97 billion in the previous half-year, underscoring a marked slowdown in cross-border trade settlements routed through PAPSS.
The development is especially notable given Nigeria’s leading role in the platform and the strategic importance of the system for the African Continental Free Trade Area (AfCFTA).
PAPSS cross-border payments fall 53% to ₦5.6bn amid low trade settlement activity
PAPSS, developed by the African Export-Import Bank (Afreximbank) in partnership with the African Union, was launched to enable real-time, low-cost cross-border payments in local currencies across Africa.
The platform aims to reduce reliance on hard currencies, cut transaction costs, and boost intra-African trade by simplifying payment processes and settlement.
Nigeria is the top participating country in PAPSS, with over 22 banks integrated into the system.
These institutions include major players such as First Bank of Nigeria, Access Bank, UBA, Zenith Bank, Fidelity Bank, Union Bank, Stanbic IBTC, Sterling Bank, Wema Bank, and several others.
Despite the broad integration, the steep decline in PAPSS transactions indicates that the system has not achieved the expected traction in the Nigerian market.
The CBN’s report suggests that Nigerian businesses and financial institutions may still prefer traditional cross-border payment routes, which often rely on correspondent banking and global payment systems.
These alternatives, however, typically involve higher fees, longer settlement times, and greater exposure to foreign exchange volatility.
Why the drop in PAPSS cross-border payments matters
The contraction in PAPSS activity is a setback for the AfCFTA’s broader goal of deepening intra-African trade.
The success of the continental trade pact depends heavily on the ability of businesses to transact seamlessly across borders.
PAPSS was designed to remove a major bottleneck—payment settlement—by allowing transactions in local currencies without the need for multiple currency conversions.
Analysts say the fall in PAPSS cross-border payments may reflect persistent challenges such as low awareness among traders, limited merchant acceptance, and the lingering dominance of global payment networks.
Some market operators also point to operational issues, including onboarding delays and inadequate support for smaller financial institutions.
“The system is a good innovation, but adoption has been slow because businesses are still not fully confident in the platform,” said a payments industry expert who requested anonymity.
“The cost benefits are there, but awareness and trust need to be built over time.”
PAPSSCARD: A new push for adoption
In an effort to deepen usage, PAPSS in collaboration with Afreximbank and Mercury Payment Services (MPS) introduced the PAPSSCARD last year.
The card was launched as a solution to enable fast, secure, and affordable retail payments across African borders, with the goal of keeping transaction value and data within the continent.
At the launch in Abuja, Mike Ogbalu III, CEO of PAPSS, described the PAPSSCARD as a “major advancement in the continent’s financial architecture,” stressing that the card was more than a payment tool but a symbol of Africa’s progress towards financial independence.
“The PAPSSCARD reflects Africa’s ability to create home-grown solutions that align with how the continent trades, lives, and grows,” Ogbalu said.
The PAPSSCARD aims to challenge the dominance of global card networks, which route most African transactions through foreign systems, increasing fees and transferring data outside the continent.
By processing payments entirely within Africa, the card is designed to keep value and economic benefits within the continent.
Stakeholders urge stronger push for adoption
Industry stakeholders believe that for PAPSS to achieve its intended impact, regulators and market players must intensify efforts to drive adoption.
This includes increasing awareness among businesses, incentivising banks to promote the platform, and ensuring that the system is fully integrated with trade and settlement processes across the continent.
Some experts also called for stronger government support, including incentives for exporters and importers to use PAPSS for cross-border settlements. They argued that sustained policy backing could accelerate the shift away from conventional payment routes.
“PAPSS has the potential to transform intra-African trade, but its success will depend on the willingness of stakeholders to embrace the system and make it the default for cross-border payments,” said a financial sector analyst.
The sharp fall in PAPSS cross-border payments in the first half of 2025 raises questions about the platform’s adoption in Nigeria, despite the country’s leading participation.
With the AfCFTA’s success tied to seamless payment settlement, the decline underscores the need for renewed efforts to drive usage and build confidence among businesses.
As Nigeria continues to expand its trade relationships across Africa, the effective utilisation of PAPSS will remain a critical factor in unlocking the full potential of intra-continental commerce.
