DAR ES SALAAM: BUSINESSES in Tanzania are expected to benefit from faster and easier cross-border payments following the launch of a new system that enables companies and individuals to send and receive money across participating African countries using their local currencies.
The Pan-African Payment and Settlement System (PAPSS), launched by UBA Tanzania, is expected to simplify financial transactions, reduce payment delays and eliminate the lengthy chain of correspondent banks previously involved in transferring money between countries.
Speaking during the launch, the bank’s Head of Operations, Flavia Kiyanga, said the system would transform cross-border payments by allowing businesses to transfer money directly without going through multiple correspondent banks.
“PAPSS is designed to make payments easier for businesses. Under the previous system, transactions went through correspondent banks before reaching the recipient, but through PAPSS, funds can be received promptly once a transaction is completed,” she said.
She said the system would enable businesses to use their Tanzanian shilling accounts to make payments in other participating countries, reducing transaction time and facilitating trade across the continent.
Ms Kiyanga said the bank had joined the system in response to growing business activities in Tanzania, while commending the government under President Samia Suluhu Hassan for measures aimed at promoting economic growth.
The bank’s National Payments Supervisor, Juma Kalumwana, said customers would access the service through branches and digital platforms, including WhatsApp and Facebook.
He said the digital channels would make financial services more accessible, particularly amid growing smartphone usage in the country.
Mr Kalumwana explained that customers could conduct transactions using their mobile phones without visiting bank branches. Those opting for branch services would be required to provide the recipient’s details, including the account number and amount to be transferred.
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He said the transaction fee was 2.5 per cent of the amount sent, subject to a maximum charge of 20 US dollars, equivalent to approximately 70,000/- .
Regarding transaction limits, he said customers could transfer up to 5,000 US dollars per transaction and a maximum of 10,000 US dollars per day, subject to service conditions and prevailing exchange rates.
He added that the system incorporates security measures to protect financial transactions, while central banks in participating countries oversee their respective financial systems and applicable exchange rates.
Mr Kalumwana further noted that senders must hold an account with the bank, but recipients could receive funds through other banks participating in PAPSS without necessarily having an account with the institution.
The bank’s Head of Marketing and Communications, Geofrey Magugi, said the institution was the first in Tanzania to enter into an agreement with PAPSS to offer the service.
He said the initiative was part of efforts to improve financial services, simplify cross-border payments and create more opportunities for businesses to trade across Africa.
“Joining PAPSS is an important step towards improving financial services and simplifying cross-border payments, while giving businesses greater opportunities to conduct transactions more conveniently across participating African countries,” he said.