Egypt signs COMESA’s cross-border pay framework

By Yomna Yasser On Sep 13, 2015

Egypt will start a cross-border payment system to make it easier for traders to move money within the 19-member Common Market for East and South Africa (COMESA) economic bloc.

Hisham Ramez – Governor of the Central of Egypt (CBE) – announced in an Arab banking meeting Sunday that CBE has signed an agreement with the COMESA Clearing House and Central Bank of Mauritius, to activate the Regional Payment and Settlement System (REPSS).

The Regional Payment and Settlement System (REPSS) is a gateway through which central banks in Africa can make cross-border payments on behalf of commercial banks. REPSS, if accepted by all the countries in the region, is expected to drastically cut the cost of regional trade in COMESA.

REPSS benefits exporters and importers in the region by allowing for a faster, safe and secure transfer of funds and eliminates the need for confirmed Letters of Credit and associated costs, with Central Banks guaranteeing payment through prefunding of commercial banks accounts held with the concerned Central Bank.

The Egyptian banking top official made his remarks during the 39th Meeting of the Council of Arab Central Banks Governors that kicked off in Cairo Sunday.

REPSS, whose main participants are Central Banks, allows member States to transfer funds within COMESA on the same day and at a lower cost.

The system also paves the way for trading on open account, the predominant method of payment within the EU and other parts of the world.

In addition, REPSS, which received funding from the European Union under its Contribution Agreement with COMESA, is run by the COMESA Clearing House (CCH) headquartered in Harare, Zimbabwe and hosted at the premises of the Bank of Mauritius.

Aimed at promoting and expanding trade within COMESA, REPSS offers benefits such as;

Payments are made through established and reliable systems.
Payments originate and are received in the formats of the financial institutions’ existing payment systems resulting in minimal system modifications.
There is predictability in payment timing and reduced payment cycle time as compared to other international payment alternatives.
The cost effectiveness of REPSS payments translate into savings for the Originator.
It provides one easy process for making cross-border payments.
The system is very secure as the funds reside at the Bank of Mauritius, the Settlement Bank of the system, which is also a member of COMESA.