How PAPE Works

Pan-African payments, simplified

It is important to notice that currencies don’t actually leave the payment gateway during PAPE cross-border payments.

High level workflow#

High level Sequence Diagram#

Step by Step#

How does money move from Sender to Receiver?

Step 0#

Suppose we have:

• Payment Gateway Sender (SenderPaymentGateway), which uses a currency called LCY (local currency), and
• Payment Gateway Receiver (ReceiverPaymentGateway), which uses a currency called FCY (foreign currency).

Suppose also that we’ve set up a PAPE liquidity provider account between SenderPaymentGateway and ReceiverPaymentGateway.

Suppose also that we have a user called Sender in SenderPaymentGateway, that wants to send some funds to Receiver in ReceiverPaymentGateway.

Sender -> Receiver

Step 1#

The Liquidity Provider will deposit some FCY funds into the receiving payment gateway.

Let’s say the Liquidity Provider deposits 1,000,000 FCY. This deposit will sit in the Liquidity Provider Pool set up by the receiving payment gateway.

All liquidity providers on the receiving payment gateway will share the same liqudity pool. Account balances of each liquidity provider will be tracked by the PAPE Blockchain.

LiquidityProvider –> (deposit 1,000,000 FCY) –> Receiving Gateway Liquidity Pool

Step 2#

The Receiving Gateway Backend will notify PAPE via PAPE APIs that a liquidity provider made a deposit. The PAPE blockchain will take note of the amount deposited and adjust blockchain account balances accordingly.

Receiving Gateway Backend –> (notify deposit from Liquidity Provider via PAPE APIs) –> PAPE PAPE Blockchain (which maintains and adjusts liquidity provider balances)

Step 3#

Liquidity Provider logs into the Liquidity Provider Dashboard created by PAPE, and sets exchange rates between LCY and FCY.

Liquidity Provider –> (sets exchange rate) –> Liquidity Provider Dashboard

Let’s assume the exchange rate set is 2 LCY = 1 FCY.

Step 4#

Suppose the Sender wants to send 100,000 FCY to receiver.

The Sender will use their typical banking app, which will query PAPE APIs for the best exchange rates between LCY and FCY.

The user will confirm the exchange rates are good enough for them, and the destination name matches before submitting the payment request.

Sender –> (uses bank app to submit receiver account details and amount) –> [Best LCY/FCY exchange rate will be returned, including name validations.]

Step 5.#

Let’s assume the liquidity provider above set the best rate of 2 LCY = 1 FCY.

Which means Sender will have to send 200,000 LCY, so that their receiver will receive 100,000 FCY.

If this is OK with the sender, the sender will confirm within the bank app, and 200,000 LCY will be debited from the sender’s account, and credited into the Sending Gateway Liquidity Pool account.

Step 6.#

Sender Gateway Backend –> (notify PAPE about payment from Sender)

Step 7.#

PAPE does its magic, and adjusts account balances accordingly.

Step 8 and 9#

Receiving Gateway Backend polls PAPE endpoints, and detects it has to send 100,000 FCY to Receiver. The Receiving Gateway must honor the cross-border payment. Funds will come from the liquidity provider pool.

Step 10.#

The Liquidity Provider can at any moment withdraw the 200,000 LCY it has gained from enabling a trade between Sender and Receiver payment gateways.