Kenyan businesses can pay and receive money in African currencies through the Pan-African Payment and Settlement System, but its chief executive says participating banks mark up its low fees, so customers do not receive the full savings.
Mike Ogbalu III told Capital FM that the system nets off payments flowing in opposite directions between countries and settles only the difference in an accepted currency, reducing the hard currency traders must find.
The exposure is substantial. Afreximbank’s Kenya country brief, published in May 2026, estimates that African buyers took about 39 per cent of Kenya’s merchandise exports in 2025, roughly US$3.4 billion of US$5.6 billion in two-way trade with the continent.
How the netting works
A Kenyan exporter selling to Uganda can be paid in shillings while the buyer pays Ugandan shillings. Ogbalu said transactions clear in under 120 seconds, against several days under correspondent banking, and that the system caps its average infrastructure fee at about 0.1 per cent of value.
He put conventional cross-border payment and remittance costs at 8 to 10 per cent. A benchmark cited in the system’s own February announcement, the World Bank’s 2023 Remittance Prices data, puts the average cost of sending money across African borders at 7 to 8 per cent against a global average of 6 to 7 per cent, with settlement taking three to seven business days. Remittance prices are not trade payment charges, so the comparison is indicative.
Who is connected in Kenya
KCB Group said it became the first bank in East Africa to join, signing in Accra on the sidelines of Afreximbank’s annual meetings. The operator’s June 2026 coverage directory lists Access Bank, African Banking Corporation, KCB, Stanbic Bank and UBA as Kenyan participants, with 48 additional banks and SACCOs reachable for inbound payments. Capital FM also names Equity Bank, which does not appear in that edition.
The wider local link is Pesalink, Kenya’s instant payment network, which signed in Nairobi on 26 February 2026. Operated by Integrated Payment Services Limited, owned by the Kenya Bankers Association, it connects more than 80 Kenyan banks, fintechs, SACCOs and telcos to more than 160 institutions on the platform. Ogbalu called Pesalink the first switch piloted for terminating transactions in Kenya.
The cargo behind those payments is mostly manufactured. Afreximbank records Uganda taking 31 per cent of Kenya’s exports to African markets in 2025, Tanzania 16 per cent, Rwanda 10 per cent and the Democratic Republic of Congo 8 per cent, concentrated in processed food and beverages, cement, pharmaceuticals and household goods.
The limits that shape who benefits
The same directory publishes caps on inbound payments routed through its licensed extended network partner: KSh 999,999 per transaction in Kenya, 5 million Ugandan shillings in Uganda and 5 million Tanzanian shillings in Tanzania, with a daily ceiling of 10 million in Tanzania. Those are indicative limits for that route, not for payments between direct participants, but they show why the rails currently suit smaller consignments.
At a Lagos briefing on 11 September, the operator reported that transaction volumes rose about 1,000 per cent between comparable periods in 2025 and 2026 while values rose about 120 per cent. Those percentages imply the average transaction shrank to roughly a fifth of its earlier size, a calculation from published figures rather than a disclosed average.
Reported savings of 92 to 95 per cent per transaction and up to 80 per cent lower foreign exchange needs are self-reported. Ogbalu conceded the organisation has not comprehensively measured its impact on trade, and neither the briefing nor the interview disclosed volumes or values.
| Source and date | Countries | Banks and providers | Switches |
|---|---|---|---|
| Coverage directory, June 2026 | 31 reachable; text says over 20 available | 190+ participants; 440+ institutions reachable | Not stated |
| Afreximbank briefing, 11 September 2026 | More than 30 | More than 200 | 16 |
| Ogbalu interview, 12 November 2026 | 31 | More than 220 | 17, including 12 national |
The counts are not strictly comparable, because availability, signed participation and termination reach measure different things.
The wider constraint
Payments are one of several binding problems. Afreximbank, which founded the system with the African Union, estimates in its African Trade Report 2026 a trade finance gap of about US$74 billion in 2025, and notes that shrinking correspondent banking relationships and limited foreign exchange liquidity restrict African trade. It recommends expanding the payment system alongside faster implementation of the African Continental Free Trade Area.
The next scheduled milestone is the operator’s COWRY conference in Addis Ababa on 26 and 27 November, co-hosted with the National Bank of Ethiopia. Ogbalu says 2027 is when attention shifts from building the network to driving volumes. For Kenyan traders the test is narrower: whether the price their bank quotes reflects that 0.1 per cent infrastructure cost.
