admin A groundbreaking initiative led by the Bank for International Settlements (BIS) and several central banks is set to revolutionise cross-border payments. Announced on July 1, the completion of phase three of ‘Project Nexus’ marks a significant milestone, introducing a comprehensive blueprint to streamline the connection of domestic instant payment systems (IPS). The project’s goal is to standardise the way IPS connects globally, allowing seamless and rapid cross-border transactions.
The innovative approach eliminates the need for IPS operators to build custom connections for each new country. Instead, a single connection to Nexus would enable an IPS to interact with all other countries in the network. This advancement promises to simplify and expedite international payments, making them faster and more cost-effective.
Expansion and Future Prospects
In the upcoming phase four, Project Nexus will expand its reach by integrating the Reserve Bank of India alongside existing participants: Bank Negara Malaysia, Bangko Sentral ng Pilipinas, Monetary Authority of Singapore (MAS), and Bank of Thailand. This inclusion will extend the user base to encompass India’s Unified Payments Interface (UPI), the world’s largest IPS. Although Bank Indonesia joined as a special observer during phase three, its involvement underscores the growing interest and potential for widespread adoption.
Project Nexus is the first BIS Innovation Hub project in the payments sector to move towards live implementation. BIS General Manager Agustín Carstens highlighted its potential to connect 1.7 billion people globally, facilitating instant, affordable payments. The project’s live implementation is anticipated by 2026, aiming to revolutionise the current landscape where more than 70 domestic IPS exist, but cross-border payments remain slow and expensive.
Towards Seamless Global Payments
Introduced in July 2021, Project Nexus initially aimed to develop technical standards, operational guidelines, and common functionalities for a scalable network connecting national IPS. The project’s blueprint, now refined and expanded, envisions cross-border payments reaching their destinations within 60 seconds. This initiative builds on successful bilateral linkages, such as the PayNow-PromptPay connection between Singapore and Thailand and the recent linkage between Singapore and India’s UPI.
To support the transition to live implementation, the central banks and IPS operators involved will establish the Nexus Scheme Organisation (NSO). This new entity, wholly owned by the participating central banks and IPS, will manage the scheme and continue efforts to achieve instant cross-border payments at scale. BIS will maintain a technical advisory role, facilitating cooperation among members and new participants to realise Nexus’s global ambitions.
By advancing from concept to reality, Project Nexus represents a significant leap towards efficient and seamless international payments, poised to benefit millions worldwide.
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