Standard Bank Becomes First African Bank to Integrate China's Payment System for Cross-Border Transactions

 

Standard Bank Headquarters in Johannesburg 
Image Credit: Wikipedia 

Standard Bank is making it easier for African businesses to pay Chinese suppliers by becoming the first African bank to directly connect to China's Cross-Border Interbank Payment System (CIPS). This new system allows companies to send payments directly in Chinese currency (renminbi or yuan), bypassing the need to first convert money to US dollars. This major change is expected to make payments faster, cheaper, and less complicated for African businesses that import goods from China. The bank received permission to use CIPS in June 2025 and began offering the service in September 2025. African businesses that use Standard Bank can now pay their Chinese suppliers directly in the Chinese currency. Before this, payments often had to be sent through a middle step, like converting currency to US dollars. This added time and cost. Standard Bank is the first African bank to join China's CIPS, which is a payment network similar to the common SWIFT network.

 With China being Africa's largest trading partner, the new system helps businesses save money on currency conversion fees and settle payments much faster. This can help improve a company's cash flow and reduce money-related risks. This move also shows a bigger trend where some countries want to reduce their reliance on the US dollar for international trade. The change comes as trade between Africa and China is increasing. A Standard Bank survey found that more African businesses are now importing from China than in previous years.

How it Works

By connecting to CIPS, Standard Bank now has a direct line to China's payment system. This allows payments to be processed in real-time or near-real-time, which is much faster than the old way. This is great news for African companies that rely on Chinese products for things like electronics, building materials, and manufacturing.

About Standard Bank

Standard Bank is the largest banking group in Africa by assets, with a history spanning over 160 years. It offers a wide range of financial services across more than 20 countries on the continent. 

Key Operations and Services

Standard Bank's services are aimed at a variety of customers, from individuals to large corporations. 

Retail Banking: Provides everyday banking services like accounts, loans, and credit cards for individual customers.

Business Banking: Offers financial solutions tailored for small and medium-sized businesses.

Corporate and Investment Banking: Works with large companies, governments, and financial institutions on things like investment banking, risk management, and transaction services.

Wealth Management: Offers investment and wealth-building services for high-net-worth clients. 

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Strategic Expansion in Africa 

The bank has a strong focus on growing its business throughout Africa, where it has a large footprint. 

North Africa: In 2025, Standard Bank opened a new office in Egypt to explore more business opportunities in North Africa.

West Africa: The bank has previously announced plans to expand its presence in Nigeria and Angola.

East Africa: It expects faster growth in the East African market in the short term and is also looking for opportunities to buy other companies. 

Performance and Key Developments

In August 2025, Standard Bank announced record first-half profits, with its headline earnings increasing by 8% to 23.8 billion rand. 

The bank is also focusing on new trends and technology: 

Digital Transformation: The bank is investing in digital services to improve customer experience.

Sustainable Finance: It is including environmental and social factors into its lending and investing decisions.

Fintech Partnerships: The bank works with financial technology (fintech) companies to offer modern financial solutions.

China's CIPS: Standard Bank gained access to China’s Cross-border Interbank Payment System (CIPS), which is meant to help with trade between Africa and China. 

Impact on African Economies

As Africa's biggest bank, Standard Bank plays a big part in the continent's financial health. 

Economic Development: The bank helps finance projects in infrastructure, agriculture, and mining.

Financial Inclusion: It aims to provide banking services to people who previously had no access to them.

Major Employer: The bank is a large employer and taxpayer in South Africa and was named a top employer for young graduates there in 2025. 

About China's Cross-Border Interbank Payment System (CIPS)

China's Cross-Border Interbank Payment System (CIPS) is a crucial financial infrastructure launched by the People's Bank of China (PBOC) to facilitate and streamline global transactions in its currency, the renminbi (RMB). It serves as the primary clearing and settlement platform for cross-border RMB business, aiming to boost the currency's international use and provide a reliable, efficient, and cost-effective alternative to existing global systems. 

Purpose and Strategic Importance

The main purpose of CIPS is to support the internationalization of the RMB and reduce the global financial system's heavy reliance on the US dollar and Western-dominated networks like the Society for Worldwide Interbank Financial Telecommunication (SWIFT). Key objectives include: 

Streamlining Transactions: CIPS replaces a former "patchwork" of offshore clearing arrangements, offering a single, efficient platform for RMB payments that cuts costs and processing times.

Enhancing Efficiency: By providing direct clearing and settlement services, CIPS eliminates several intermediaries previously involved in cross-border RMB transactions, enabling faster, often near-instantaneous, processing.

Mitigating Geopolitical Risk: The system offers a level of protection from potential sanctions or disruptions affecting other global payment networks. This strategic independence has become a significant consideration for China and its trading partners.

Supporting the Belt and Road Initiative (BRI): CIPS provides the financial backbone for the BRI, facilitating trade and investment in participating countries and promoting the wider use of the RMB across Asia, Africa, and Europe. 

How CIPS Works

CIPS operates as a wholesale payment system, providing clearing and settlement services for participating financial institutions. It functions as a Real-Time Gross Settlement (RTGS) system, meaning transactions are settled individually and immediately (or near instantly), which reduces settlement risks. 

Participants: The system includes two main types of participants:

Direct Participants: These are typically large domestic and foreign banks that open accounts directly with CIPS and send/receive messages through the system. As of June 2025, there were 176 direct participants.

Indirect Participants: These financial institutions access CIPS services through a direct participant. There are over 1,500 indirect participants across 121 countries and regions.

Messaging and Standards: CIPS utilizes industry-standard messaging formats, specifically the ISO20022 and SWIFT MT standards, to ensure compatibility with the global financial system. While CIPS has the ability to operate independently, it currently relies on the SWIFT network for over 80% of its messaging to leverage its extensive global reach.

Operating Hours: CIPS Phase 2 extended operating hours to "5x24 hours + 4 hours," ensuring almost round-the-clock service to cover nearly all global financial market time zones.

Settlement Modes: The system offers both Real-Time Gross Settlement (RTGS) for immediate finality and Deferred Net Settlement (DNS) to help participants manage liquidity efficiently. 

Growth and Global Impact

Since its launch in 2015, CIPS has experienced significant growth in transaction volume and participant numbers. 

Transaction Volume: In 2024, CIPS processed over 8.2 million transactions, totaling RMB 175.49 trillion (approximately USD 24.47 trillion), a 42.6% increase in value year-on-year.

Global Reach: The system's network spans over 189 countries and regions, covering business with more than 4,900 banking institutions globally.

Role in a Multipolar Financial System: The rise of CIPS is a key development in challenging the dominance of the US dollar. By offering a viable, efficient, and secure platform for RMB-settled transactions, China is working to create a more diversified and multipolar global financial architecture, reducing vulnerability to unilateral financial actions by other nations. 

CIPS vs. SWIFT

It is important to note the difference between CIPS and SWIFT. SWIFT is primarily a messaging network that securely transmits instructions between banks for various currencies, while CIPS is a payment system designed specifically for the clearing and settlement of RMB transactions. The two systems currently cooperate closely, with CIPS leveraging SWIFT's messaging infrastructure for global connectivity. However, CIPS is developing its own independent messaging capabilities as part of a long-term strategy to gain greater autonomy. 

China views CIPS as a crucial tool for its economic aspirations, aiming for it to eventually assume significant importance in the future of global finance, alongside other innovations like its exploration of the digital renminbi (e-CNY) and the mBridge project for multi-central bank digital currency settlements.