The Pan-African Payment and Settlement System (PAPSS) is set to connect to the payment infrastructure of China and India by early 2027, according to The Africa Report, marking the first time the Afreximbank-backed system will route transactions outside the continent since its launch.
PAPSS was built jointly by the African Export-Import Bank (Afreximbank) and the African Union specifically to let African businesses pay one another in local currencies, bypassing the costly detour through the US dollar. Extending that architecture to Asia means African importers and exporters dealing with Chinese and Indian counterparts could, in theory, settle in their own currencies without touching a correspondent bank in New York or London.
China and India are not arbitrary starting points. China has been Africa's largest single trading partner for well over a decade, and India has rapidly closed the gap — together the two economies account for a substantial share of the continent's merchandise trade. Dollar-intermediated settlement on those corridors imposes double conversion costs on African businesses: once out of the local currency and once back in, at spreads that eat directly into margins for commodity exporters and manufacturers alike.
The timeline — early 2027, per The Africa Report's September 2026 reporting — is tight. Building interoperability between PAPSS and Asian payment rails requires bilateral technical agreements, regulatory sign-off in multiple jurisdictions, and reconciliation of compliance frameworks that differ sharply between, say, India's Unified Payments Interface (UPI) and the settlement systems that PAPSS currently runs across African central banks. Any slip in one jurisdiction ripples across the whole go-live date.
For African operators, the practical upside is clearest in trade-finance costs. Businesses sourcing manufactured goods from Chinese suppliers or pharmaceutical inputs from Indian generic makers currently absorb foreign-exchange risk twice per transaction. A direct PAPSS-to-Asian-rail link would compress that to a single conversion, and — if the system achieves meaningful volume — create observable mid-market rates on corridors that today have almost no transparent pricing.
Investors watching African fintech should note what this does to the addressable market for PAPSS participants. The system's current design allows commercial banks and licensed payment service providers to plug in as direct participants. If the China and India links go live on schedule, those participants gain access to settlement on corridors that collectively dwarf intra-African trade in absolute dollar terms. That changes the revenue calculus for any institution that has already invested in PAPSS connectivity.
The geopolitical dimension is equally pointed. Linking African settlement infrastructure directly to Chinese payment systems — at a moment when Washington is actively scrutinising dollar alternatives — will attract attention from Western regulators and correspondent banks. Afreximbank has navigated US sanctions concerns before, most visibly in its dealings with Russia-linked trade financing, and the institution's leadership will need to manage that exposure carefully if the Asian links are not to create compliance headaches for African banks that also maintain dollar correspondent relationships.
On the Indian side, New Delhi has been aggressively internationalising UPI, striking bilateral deals with Singapore, the UAE, and several other markets. An Africa connection fits that strategy, but India's approach has typically been government-to-government before commercial rollout — meaning the PAPSS-India link may depend as much on diplomatic calendars as on technical readiness.
Why it matters: if PAPSS delivers live China and India connectivity by early 2027 as reported, African businesses trading with Asia gain their first credible infrastructure for local-currency settlement at scale — a structural cost reduction on the continent's highest-volume external trade corridors, and a meaningful step toward the AU's long-stated goal of reducing Africa's dependence on the dollar in international commerce.