Traders in the Common Market for Eastern and Southern Africa (COMESA) economic bloc will soon be able to make direct and instant settlements for goods and services following the roll out of a new payment gateway by the member states.
The Digital Retail Payment Platform (DRPP) whose piloting has commenced on the Zambia-Malawi corridor is expected to enable businesses to make payments in local currencies.
Speaking during the 24th COMESA Heads of States Summit in Nairobi, President William Ruto who has also been elected Chairman of COMESA Authority backed the system to increase trade especially among smallholder farmers and enterprises.
“This digital corridor must not end in capital cities. It must extend to every corner of our region connecting the stallholder farmer in a rural village to the bustling urban market. The launch of DRPP will link farmers directly with consumers and markets ensuring fair access and transparency,” said President Ruto.
DRPP is expected to cut transaction cost and time by bypass intermediaries who contribute to high transaction costs especially for small and medium enterprises.
“The DRPP is an Instant, Inclusive cross-border payment system designed with affordability at its core, ensuring transaction costs remain below 3pc of the transaction value,” said Lee Kinyanjui, Cabinet Secretary for Investments, Trade and Industry.
The new payment system which was announced during the summit has been developed riding on success of the existing Regional Payment and Settlement System (REPSS) which provides institutions, enterprises and individuals with seamless fund transfers across the states with end-of day settlement in hard currencies, through the Bank of Mauritius as the Settlement Bank.
DRPP is expected to facilitate intra-COMESA trade by enhancing cross-border trade through settlements in local currencies a move which is further backed to protect enterprises from currency related shocks.
“By starting with the Malawi–Zambia corridor, we are demonstrating how traders can exchange value seamlessly without relying on scarce foreign currency. This reduces costs, shields businesses from currency volatility, and most importantly, opens the door for SMEs, women, and youth to participate more fully in regional trade, reaping the tangible benefits of integration,” added Lee.
Developed under COMESA Clearing House (CCH), which is a specialized financial institution which targets to strengthen financial cooperation and regional integration, DRPP will also boasts of interoperability feature which allows integration with banks, mobile money operators, financial technology firms and digital financial service providers.
After the pilot phase, DRPP is expected to be rolled out to all 21 member states in coming months.
