The Reserve Bank of India (RBI) has partnered with Project Nexus, an international initiative aimed at facilitating instant cross-border retail payments.
This collaboration will connect India’s Unified Payments Interface (UPI) with the Fast Payment Systems (FPSs) of Malaysia, the Philippines, Singapore, and Thailand. These countries will be the founding members and initial adopters of this platform.
The goal is to create a seamless platform for transactions across these countries, with plans to expand to additional nations in the future.
Advertisement
What is Project Nexus?
The Bank for International Settlements (BIS) Innovation Hub launched Project Nexus to revolutionize international payments. The main objective is to enhance cross-border money transfers by seamlessly integrating various local Instant Payment Systems (IPS).
Project Nexus aims to be the first implementation-focused initiative by the BIS Innovation Hub, providing an open, fast, and secure environment for sending money internationally. This project supports connectivity for both Person-to-Person (P2P) and Person-to-Merchant (P2M) payments.
Advantages of Project Nexus
Project Nexus standardizes global instant payments by establishing a unified connection. Previously, each country’s Fast Payment Systems (FPSs) required separate links to communicate with one another.
Nexus simplifies this by providing a single integration point for these systems. This simplified approach reduces the time and costs associated with integration. The key advantages include quicker transactions, often completed in under 60 seconds, and reduced costs, ultimately improving user satisfaction and expanding user adoption.
In a press release, RBI said, “An agreement to this effect was signed by the BIS and the central banks of the founding countries i.e., Bank Negara Malaysia (BNM), Bank of Thailand (BOT), Bangko Sentral ng Pilipinas (BSP), Monetary Authority of Singapore (MAS), and Reserve Bank of India on June 30, 2024, in Basel, Switzerland. Indonesia, which has been involved from the early stages, continues to be involved as a special observer.”
Also Read: Why Are Banks Seeking Clarity on Credit Cards from RBI?
Indonesia has been actively involved as a special observer since the beginning.
Whereas, the platform is set to expand to include more countries in the future. Expected to launch in 2026, Nexus is anticipated to significantly improve the efficiency, speed, and cost-effectiveness of retail cross-border payments once operational.
Want to learn the art and science of managing your money? The 1% Club can help. Details here
