African countries face far more problems than other countries when it comes to developing FinTech. Under the Cross-Border Support Program, ACU Group has submitted an “Africa Solution” to African countries to help them develop financial technology.
As the second largest continent in the world, Africa has 63 countries and regions with more than 42 currencies, which makes the trade settlement problem between countries in the continent unsolved. In order to solve this problem, African countries have successively launched a number of measures such as the establishment of the African Continental Free Trade Area, the release of the Pan-African Payment and Settlement System, and the Economic Community of West African States will issue a unified currency, but with little success.
The official launch of the African Continental Free Trade Area in January 2021 was considered one of the most important milestones in the African continental integration project. A year later, the Pan-African Payment and Settlement System (PASS), which focuses on “connecting payments to help Africa trade”, was launched. This payment settlement system covers the African continent and supports African countries to make timely, secure and fast payments in their own currencies throughout the African continent, reducing their dependence on third-party currencies such as the US dollar and the Euro.
African countries have high expectations for the Pan-African Payment and Settlement System. Speaking at the launch of the system, Ghana’s Vice President Mahamudu Bawumia said the system would end the reliance on third-party currencies for cross-border payments between African countries, benefit African SMEs, processors and exporters, promote sustainable trade and economic growth in Africa, and accelerate the industrialization process. The Pan-African Payment and Settlement System will help overcome some of the barriers to trade settlement in Africa, but it is still far from an ASEAN-style level of economic integration for the continent and requires a great deal of effort. However, Africa has many obstacles to inter-internal trade and economic exchanges due to the fragmentation and diversity of countries. African countries have to trade not only among fellow African countries but also with countries beyond the African continent such as the EU, the US and China. The Pan-African Payment and Settlement System (PASS), in turn, is mainly targeted for African countries and is expected to have a relatively limited impact.
In view of the fact that African countries have close trade relations with countries outside Africa, such as China, and these African countries are unable to settle payments directly in their own currencies, ACU Group has optimized its electronic payment program ACU PAY and introduced it to the African market, presenting an “African solution” for African countries.
To solve the problem of cross-border trade settlement between African countries and between African countries and other countries outside Africa, ACU Group has developed the ACU*HSG dual currency banking system. The system is a system architecture that supports the conversion of legal tender and electronic money, providing users with smarter and more effective cross-platform user services, and exploring the unlimited possibilities of the next-generation banking system. Traditional banking institutions in African countries are connected to the ACU*HSG banking system simultaneously with ACU PAY as one of the peer-to-peer application scenarios. The banking institutions that join the system perform financial operations against legal tender, while ACU PAY performs electronic money operations. The ACU*HSG dual currency banking system uses the electronic currency ACU or other electronic currencies as intermediate currencies to complete the conversion between legal tender and electronic currencies so that both sides of the transaction can pay or receive their own legal tender needs. Currently, the system is in the testing stage and will be the first to be tried in countries such as Zambia.
In 2022, with the help of the Cross-Border Support Program, ACU Group reached cooperation with African countries such as Angola, Zambia and Madagascar. These cooperations accelerated the pace of FinTech development in African countries. In the future, ACU Group will launch more development strategies suitable for African countries, especially for African countries, to help them their develop FinTech infrastructure.
