South Africa’s removal from the grey list on 24 October is more than a reputational repair job; it is a practical opening to reduce friction in cross-border finance.
Grey-listing raised diligence costs and affected the risk appetite for everything from trade finance to remittances. Delisting does not erase compliance obligations, but it does lower perceived country risk and gives financial institutions cover to expand services that stalled under heightened monitoring.
The most practical network to take advantage of this reprieve is the Pan-African Payment and Settlement System (PAPSS). PAPSS supports real-time cross-border payments across a growing footprint of central banks and commercial banks in Africa. PAPSS allows for African currencies to be matched directly with a US dollar leg, and this matters because many corridor costs are the result of forced routing via external hubs. If you remove the dollar intermediary for eligible flows, you compress spreads, gain speed, and preserve scarce foreign exchange.
PAPSS’s momentum is visible. The system confirmed Morocco as its 17th country of presence in July, signalling North African uptake alongside its original West African core. By late 2025, public updates showed PAPSS linking payment systems in more than 10 countries and 150 banks. That scale suggests it is now a working service, not only a trial. For South African banks that have spent two years answering tougher overseas partner queries, a broader, more liquid African payments network could re-open avenues for growth.
The Africa Currency Marketplace (PACM), announced in July by PAPSS, is the next piece of the puzzle. Instead of each corridor hunting for counterparties ad hoc, the marketplace is designed to match local-currency demand and supply across regions, with transparent pricing and clearing rules. If it works as described, SMEs shipping goods to Kenya or Ghana will not have to swallow the same double-conversion pain that makes “Africa trade” paradoxically expensive. The rand trades easily against some currencies but not consistently across Africa. A structured marketplace could reduce exchange rate costs for typical invoice amounts.
What does delisting change on the ground? First, it reduces the “scarcity premium” imposed by global banks and investors wary of AML/CTF defects. Second, it allows domestic banks to re-prioritise regional growth projects – subject, still, to robust KYC/monitoring – without fearing that every increment of cross-border activity will trigger a new set of queries from correspondents. Markets appeared to read the delisting that way – the rand gained on the day, a small but telling signal.
None of this is automatic. South Africa has not been the first mover on regional retail-payments reform and risks missing network effects if it waits for “perfect alignment”. Rather than trying to do everything at once, South Africa could start with a focused trial: two cross-border routes and two use-cases, measured carefully. For example, South Africa–Kenya and South Africa–Ghana are meaningful trade and remittance lanes with improved digital infrastructure.
To keep risk simple, invoice settlements could be limited to about US$25 000 per payment, and diaspora remittances could remain within existing exchange control allowances. A specified trial period, with published benchmarks on fees and settlement times, would provide evidence to refine the approach.
Regulators can help by establishing a sandbox framework that recognises PAPSS/PACM settlement for small-ticket flows, with standardised data-sharing and audit trails compatible with South Africa’s AML regime. The aim is not to bypass the law, but to recognise the payment system has changed and that some old documentation habits – built for dollar-based transfers – may no longer fit.
There will be limits. Delisting does not suspend enhanced due diligence where warranted, nor does it magically solve FX scarcity in partner markets.
If South Africa uses the coming two years to step onto PAPSS in a focused way, it can translate the end of grey-listing into tangible business value, with shorter settlement times, lower effective spreads, and expanded African revenue lines. Miss the window, and South Africa could be left outside of critical regional payments infrastructure.
Lerato Lamola is a partner at Webber Wentzel.
Disclaimer: The views expressed in this article are those of the writer and are not necessarily shared by Moonstone Information Refinery or its sister companies.
