Faster Payments, New Risks: Central Africa’s AML Controls Face PAPSS Test
By FRANKLIN FRANCIS FREY
Faster Payments Enter Central Africa
CROSS-border payments in Africa are entering a new phase as the Pan-African Payment and Settlement System (PAPSS) expands into Central Africa.
The Bank of Central African States (BEAC) joined PAPSS on 9 July 2026. The move brings the six countries of the Central African Economic and Monetary Community (CEMAC) closer to the continent-wide payment network.
PAPSS allows participating countries to make cross-border payments in local currencies. As a result, businesses and individuals can avoid some of the delays and costs associated with routing transactions through banks outside Africa.
The system also supports the wider African Continental Free Trade Area by linking financial systems across the continent.
Trade Benefits Come With New Risks
PAPSS offers clear benefits for regional trade.
Businesses can potentially settle payments faster and at lower cost. Individuals can also transfer money across borders without relying as heavily on traditional correspondent banking channels.
However, the same speed that makes PAPSS attractive creates a major regulatory challenge.
Payments can become final within seconds. Yet CEMAC foreign exchange rules may require documentation, declarations, authorisations and other procedures before a transaction is completed.
That creates a potential gap between payment execution and regulatory verification.
If authorities discover that a transaction is fraudulent after settlement, the money may already have moved to another account or jurisdiction.
Financial Crime Risks Remain
Central Africa already faces significant financial crime challenges.
The region has rules covering money laundering, terrorist financing and proliferation financing. However, implementation remains uneven.
Cameroon, for instance, has remained under increased FATF monitoring since 2023. The FATF said in June 2026 that the country had made progress but still needed to improve risk-based supervision, information exchange and other areas of its action plan.
Meanwhile, criminals can exploit weaknesses through several methods.
These include false or inflated invoices, transaction splitting, mule accounts, shell companies and capital flight. Criminal networks can also conceal the real beneficiary of a transaction or move funds rapidly across several jurisdictions.
The Informal Economy Adds Another Layer
Low formal financial access creates an additional challenge.
The analysis estimates that fewer than 13 per cent of adults in Central Africa have and use formal financial services such as bank accounts, mobile money or credit.
Consequently, money generated through informal networks may eventually enter banks or fintech platforms without adequate customer identification.
Once that happens, suspicious funds could gain the appearance of legitimacy simply because they have passed through a formal payment system.
Controls Must Move at the Same Speed
The challenge is therefore not to slow PAPSS down.
Instead, regulators need controls that match the speed of the payment infrastructure.
That means stronger know-your-customer procedures, beneficiary identification, transaction screening and secure information sharing.
Supervisors and financial intelligence units also need access to transaction data quickly enough to identify suspicious patterns before criminal funds disappear into other accounts or jurisdictions.
The FATF’s risk-based approach requires attention to three areas: the payment, the customer and the underlying economic transaction. The last of these is particularly important because a payment can appear legitimate while being supported by fictitious trade documents.
A Continental Test
BEAC’s entry into PAPSS gives Central Africa an opportunity to participate more fully in Africa’s emerging financial infrastructure.
At the same time, it raises a difficult question: can regulatory systems protect the network without undermining its speed and efficiency?
A common minimum standard across participating countries could help close potential gaps.
For PAPSS to fulfil its promise, faster movement of money must go together with traceability, legality and security. Otherwise, weaknesses in one part of the network could create risks for the wider African financial system.
