Cross-border payments will promote trade, investment
The Country Manager of AZA Finance, Nana Yaw Owusu Banahene, has said the future of Africa’s financial system will be driven by cross-border payments.
He said it was ,therefore, important to have seamless cross-border payments to enable trade and investment opportunities among African nations.
“It’s all about cross-border payments and that is where we believe the future is”.
One of the key barriers to trade on the African continent over the years has been a platform that would ensure the seamless payment for goods and services.
To help address this challenge, the Pan African Payments Settlement System (PAPSS) was launched in Accra in January 2022.
The PAPSS is considered the fourth of five key pillars supporting the effective rollout of the African Continental Free Trade Agreement (AfCFTA).
The main aim of the PAPSS is to enable financial transactions across Africa.
Speaking in an interview with the Daily Graphic on the sidelines of the ‘Money Summit’, Mr Owusu Banahen said was optimistic that within the short to medium-term,
there would be additional payment rails to complement the PAPSS.
He emphasised that additional payment mediums were necessary to meet the increasing demand for cross-border transactions.
Achieving financial inclusion
The country manager also underscored the need for proper credit analysis, noting that the involvement of the diaspora was crucial to achieving financial inclusion as they could contribute to growth of the economy through remittances and investments.
“Our conversation around financial inclusion has been limited to deposits and transfers, we must see how we can bring in more services such as insurance – even as we try to rope-in the diaspora,” he stated.
He said technology was also very critical with regards to financial inclusion as it would allow financial services to reach everyone.
“Currently, we are able to transfer funds to the rural areas and we are looking forward to being able to extend services such as loans to people digitally.
“Technology will be the backbone of financial inclusion and banks and fintechs will continue to work together to provide these services,” he stated.
No separate regulation
Commenting on the argument that banks were heavily regulated, while fintechs are usually given a free pass, he said that was not the case as the banks and fintechs were all being regulated by the same regulations with regards to digital financial products.
“There is now a fintech and innovation office at the Bank of Ghana that regulates all digital financial products whether from banks or fintechs.
“When it comes to traditional banking services, they have their regulations but when banks are delivering fintech products, we have same regulations,” he said.