How Africa’s payment system will drive automotive, mobility industry forward

Africa’s automotive and logistics sectors are poised for a transformation as the Pan-African Payment & Settlement System (PAPSS) enables instant cross-border payments in local currencies, removing reliance on the US dollar and euro.

For years, African car dealers and logistics companies faced costly delays caused by currency conversions and slow banking processes. With PAPSS, payments that used to take up to seven business days now clear in under two minutes, drastically cutting costs and improving cash flow.

The impact is immediate for the continent’s auto industry. Africa’s automotive market is valued at roughly $21.55 billion in 2025, yet intra-African trade in vehicles remains modest, at around 120,000 units annually.

Most vehicles are assembled in countries like South Africa and Morocco and shipped to markets such as Nigeria and Kenya, with supply chains often slowed by dollar shortages. PAPSS allows dealerships and mechanics to pay for spare parts in local currencies, eliminating a common bottleneck. Experts say this could reduce hidden costs by 5–10%, enabling lower vehicle prices and more competitive “Made in Africa” options.

“PAPSS changes the game for African automotive supply chains,” said Phocus, an Abuja-based car dealership owner. “We can now order parts across borders instantly, pay in Naira, and keep our inventory moving without waiting weeks for funds.”

Logistics and mobility businesses also stand to benefit. Freight delays at ports and borders often stem from slow payment verification for duties, storage, or handling fees. PAPSS settles these payments in under two minutes, cutting demurrage costs and freeing trucks to move cargo faster. Small transport operators, who previously struggled with limited foreign currency reserves, can now pay tolls, fuel, and repairs in local money, levelling the playing field with multinational competitors.

Intra-African trade reached $192 billion in 2023, about 15% of total continental trade, largely driven by the African Continental Free Trade Area (AfCFTA). Analysts project this could reach 35% by 2045 as integration deepens. Manufactured goods, including vehicle components, now account for nearly half of regional trade, a proportion far higher than exports to other continents.

PAPSS has expanded to 19 central banks and hundreds of commercial banks, including 22 in Nigeria. The next step is integration with the African Collaborative Transit Guarantee Scheme (AACTGS), which will allow a single payment to cover both goods and transit insurance across multiple borders—creating a truly seamless trading corridor for vehicles and mobility solutions.

While PAPSS promises faster, cheaper trade, some experts warn that reliance on a single digital infrastructure could create new systemic risks. As Africa’s automotive and mobility sectors accelerate toward a PAPSS-enabled future, will the benefits of speed and cost reduction outweigh potential vulnerabilities?

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