Transaction Monitoring for AfCFTA Cross-Border Payments via PAPSS

Introduction 

Transaction monitoring for AfCFTA cross-border payments now has to happen before settlement, not after. The Pan-African Payment and Settlement System (PAPSS) clears trade payments in local currencies within seconds, which means a bank's alert logic, sanctions screening, and structuring rules must catch a suspicious payment while it is still in flight.
 

That single fact, a real-time, largely irrevocable settlement, is the reason a transaction monitoring program built for SWIFT-era batch processing will not hold up under AfCFTA volumes. This article sets out what compliance officers at banks and fintechs need to do differently.

For banks and fintechs participating in PAPSS-enabled payment corridors, achieving this requires more than updated AML policies. Institutions need technology capable of combining real-time sanctions screening, customer due diligence, continuous monitoring, and risk-based transaction monitoring before payments are settled. These capabilities are becoming essential for maintaining compliance as AfCFTA trade volumes continue to grow.

What Is PAPSS and Why It Changes AML Monitoring

PAPSS is the real-time gross settlement infrastructure developed by the African Export-Import Bank (Afreximbank), in partnership with the African Union and the AfCFTA Secretariat, to let businesses pay and be paid in local African currencies without routing through the US dollar or the euro. It was publicly launched on 13 January 2022 and has expanded its central bank membership steadily since, reaching 17 countries of presence by mid-2025 with further additions since; you should check PAPSS's own participant list for the current count, since it changes often.
 

PAPSS was built to compliment the African Continental Free Trade Area (AfCFTA), which the AfCFTA Secretariat describes as creating a single continental market of about 1.3 billion people and a combined GDP of approximately US$3.4 trillion. As that trade volume moves onto a same-day settlement rail, three things change for a compliance team.
 

Snippet-ready answer: PAPSS changes AML compliance because it settles cross-border African trade payments in local currencies in real time. Sanctions screening must run pre-settlement rather than post-settlement, since a completed PAPSS payment is not easily reversed once the central banks have netted it.

1. Screening Has to Move Before Settlement

PBecause PAPSS settles payments in real time, sanctions screening can no longer be treated as a post-payment control. Financial institutions must identify sanctioned individuals, entities, vessels, and other restricted parties before payment instructions are accepted.

To strengthen network-level AML controls, PAPSS incorporated centralized screening capabilities into its payment infrastructure. However, these controls do not replace the compliance responsibilities of participating financial institutions.

Banks and fintechs must still conduct customer due diligence, sanctions screening, politically exposed person (PEP) screening, adverse media screening, transaction monitoring, and suspicious activity investigations within their own environments. Platforms such as Youverify help institutions automate these controls before payments move through the PAPSS network.

That is the infrastructure-level baseline; the participating bank's own transaction monitoring for fraud and AML still has to cover the parts of the chain. PAPSS's network-level screening does not, and it needs to run as ongoing monitoring rather than a one-time onboarding check.

2. Currency and Corridor Risk Has to Be Mapped

Each new corridor PAPSS adds carries its own liquidity, FX, and regulatory profile, and the network has been adding countries steadily, including Tunisia's central bank and Morocco's Bank Al-Maghrib as recent examples of expansion. A monitoring program calibrated on last year's corridor list will miss the risk profile of this year's.

Managing corridor-specific risk requires continuous monitoring rather than static customer risk profiles created during onboarding. Compliance teams should continuously reassess customer risk as new payment corridors, regulatory developments, sanctions updates, or adverse media emerge. Automated risk scoring and ongoing monitoring help institutions respond to changing risk conditions without relying on manual reviews.

3. Wire Transfer Information Has to Travel With the Payment

FATF's Recommendation 16 requires financial institutions to include required and accurate originator information and required beneficiary information on payments and related messages, structured to the extent possible, and this information should remain with the payment throughout the payment chain. PAPSS's own governance framework was designed around this: PAPSS's comprehensive legal, regulatory, and operational framework includes harmonized Know-Your-Customer and Anti-Money Laundering procedures and compliance with its rules and standards are a precondition for participation.

Maintaining complete payment information also depends on accurate customer onboarding. Institutions should verify both individuals and businesses before transactions begin, ensuring originator and beneficiary information is accurate, complete, and consistently available throughout the payment lifecycle.

The Trade-Based Money Laundering Risk in AfCFTA Commodity Flows

West African commodity exports carry the highest trade-based money laundering (TBML) exposure inside AfCFTA volumes. FATF's dedicated guidance on the topic is the primary reference: the FATF's report on trade-based money laundering sets out over- and under-invoicing, multiple invoicing, and misrepresentation of goods quality or quantity as the core typologies compliance teams should be screening for.

Although customs valuation and trade documentation remain separate operational processes, financial institutions can strengthen TBML controls by verifying counterparties, identifying Ultimate Beneficial Owners (UBOs), screening for sanctions and adverse media, and continuously monitoring businesses involved in cross-border trade.

A Real-World Scenario

Consider a cocoa exporter in Côte d'Ivoire invoicing a buyer in Ghana through PAPSS. The invoice value is materially below the customs-declared export value, and the payment arrives from a third-party account not named anywhere in the underlying trade documents. Individually, none of these facts triggers a rules-based alert calibrated for retail payments. Together, they are a textbook under-invoicing pattern that a PAPSS-specific TBML rule set cross-referencing payment value against customs data and counterparty identity against trade documents is built to catch.

Building the Monitoring Program: What to Change First

Table 1 below maps the FATF obligation to what changes in a PAPSS-connected environment.

To act on this, a compliance team should work through the following sequence.
 

1. Map every PAPSS currency corridor the institution actually uses against a documented risk rating, and flag any corridor touching a jurisdiction on the FATF list of jurisdictions under increased monitoring  Angola, for example, has been on that list since October 2024 while it works through an agreed action plan.
 

2. Recalibrate transaction monitoring rules away from retail-payment baselines, since legitimate AfCFTA SME trade produces high-frequency, small-value, multi-currency patterns that generic rules misread as structuring.
 

3. Integrate sanctions screening directly with the payment gateway so originators and beneficiaries are checked before the settlement instruction is accepted, not after.
 

4. Build TBML-specific rules for commodity corridors that check payment value against customs-declared value and counterparty identity against underlying trade documents.
 

5. Confirm in writing which national FIU has primary reporting authority for each corridor, generally the originating institution's home FIU for outbound payments, before a suspicious transaction report is needed.

 

How Technology Supports PAPSS Compliance

Managing AML compliance across PAPSS-connected payment corridors becomes significantly more complex when institutions rely on disconnected systems for customer onboarding, sanctions screening, transaction monitoring, and investigations.

A unified compliance platform allows banks and fintechs to perform identity verification, Know Your Business (KYB) checks, sanctions and PEP screening, adverse media monitoring, customer risk scoring, transaction monitoring, and case management within a single workflow. This reduces manual effort while improving the speed and consistency of compliance decisions required in real-time payment environments.

Conclusion

As PAPSS accelerates cross-border payments across Africa, compliance expectations are evolving just as quickly. Financial institutions must redesign transaction monitoring around real-time settlement, strengthen customer due diligence, automate sanctions and PEP screening before payment execution, continuously monitor customer risk, and improve investigations across increasingly complex payment corridors.

Achieving these outcomes requires more than updating internal policies. It requires compliance technology capable of connecting onboarding, screening, monitoring, investigations, and reporting into a single workflow that supports faster, more informed compliance decisions.

Learn how Youverify helps banks and fintechs strengthen transaction monitoring for PAPSS-connected payment corridors through real-time sanctions screening, continuous monitoring, KYB, identity verification, risk scoring, and integrated AML compliance workflows.
 

Book a consultation with Youverify to evaluate whether your transaction monitoring framework is ready for real-time AfCFTA payments.

About the Author

Victoria Okere is a compliance writer at Youverify specializing in AML/CFT regulations across Nigeria, South Africa, and Kenya, covering CBN, FICA, POCAMLA, and FATF frameworks.