Ethiopian Mobile Wallets Prepare Continental Integration Through PAPSS Network

Ethiopia’s non-bank mobile-money operators and payment-service providers are preparing to integrate with the Pan-African Payment and Settlement System, a development expected to connect domestic digital wallets to a continent-wide cross-border payments network. The planned integration could give Ethiopian merchants, artisans and small businesses faster access to customers and trading partners across Africa by reducing the cost, time and complexity of sending and receiving payments across borders. Written by Eyasu Zekarias and published on October 4, 2026, the report outlines how local digital platforms are positioning themselves to plug into continental financial infrastructure.

PAPSS was developed by the African Export-Import Bank in collaboration with the African Union and the African Continental Free Trade Area Secretariat. The system was created to address one of Africa’s most persistent trade barriers: cross-border payments within the continent have often been slower, more expensive and more complicated than payments routed through Europe or North America. For decades, African businesses sending funds from one country to another have had to rely on correspondent banks outside the continent. A payment from one African country to another could pass through financial institutions in Europe or the United States, often requiring conversion into US dollars or euros before being converted again into a local currency.

The process adds transaction fees, foreign-exchange costs and delays that can last for days. It also leaves African trade dependent on foreign financial infrastructure and external regulatory conditions. PAPSS Chief Executive Mike Ogbalu III noted to Capital that if a payment touches another country outside this continent, it means that country can control who you pay, who you trade with and how you trade. PAPSS is designed to bypass those foreign payment corridors. The system allows participating financial institutions to clear and settle cross-border transactions using African currencies, while conducting compliance checks against international sanctions and anti-money-laundering requirements.

Ethiopia’s planned participation is significant because its digital-finance ecosystem is increasingly driven by mobile-money platforms rather than conventional bank accounts alone. Over the past decade, non-bank mobile-wallet services have become a major channel for financial inclusion, enabling millions of people to send money, make purchases, pay bills and receive funds without visiting a bank branch. Digital transactions in Ethiopia reached an estimated 33 trillion birr during the 2025/26 fiscal year, reflecting the rapid expansion of mobile-money platforms, commercial-bank applications and other digital-payment channels. Ethio Telecom’s telebirr is the dominant mobile-money operator in the country, with more than 60 million subscribers, while Safaricom Ethiopia’s M-Pesa has also expanded rapidly.

Why This Matters

Integrating domestic mobile wallets with continental payment rails directly confronts the structural friction that has historically hobbled intra-African trade. By eliminating the mandatory routing of transactions through European or North American correspondent banks, the initiative removes reliance on foreign financial systems and mitigates exposure to external monetary conditions. Settling trades directly in African currencies cuts out double conversions through the US dollar or the euro, preserving capital within the continent and shielding merchants from compounding foreign-exchange losses during cross-border exchanges.

Regulatory alignment remains a central pillar of this transition, requiring strict coordination between national monetary authorities and regional infrastructure operators. Before proceeding, non-bank mobile-wallet providers in Ethiopia must secure a formal Letter of No Objection from the National Bank of Ethiopia. This mandate ensures that cross-border digital flows adhere to domestic monetary policy, anti-money-laundering protocols and stability controls. Simultaneously, collaboration on mechanisms like the PAPSS Instant Payment System and the African Currency Marketplace establishes a controlled environment for managing liquidity and compliance at scale.

Opportunities

• Technical Integrators: Deploy direct technical connections, API links and interoperability layers for mobile wallets coordinating through EthSwitch or commercial banking partners.
• Financial Institutions: Provide cross-border clearing, settlement services and liquidity management to support mobile-money operators scaling up regional transaction volumes.
• Small Business Operators: Leverage faster, lower-cost digital payment corridors to expand merchant reach and trade directly with buyers across participating African markets.
• Payment Service Providers: Navigate National Bank of Ethiopia requirements to secure Letters of No Objection and build compliant regional transaction pipelines.

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