On Monday, July 1, India’s central bank, the Reserve Bank of India (RBI) joined hands bilaterally with various countries for seamless cross-border payments. The RBI will link the country’s Fast Payments System (FPS) and the Unified Payments Interface (UPI) for cross-border Person to Person (P2P) and Person to Merchant (P2M) payments. The RBI has joined Project Nexus, which is a multilateral international initiative to ensure instant cross-border retail transactions. India’s UPI and FPS of Malaysia, the Philippines, Singapore and Thailand will be linked through Nexus. This can further be extended to more countries later. The multilateral approach of Project Nexus will help in enhancing the international reach and efficiency of Indian payments systems.
Project Nexus is conceptualised by the Innovation Hub of the Bank for International Settlements (BIS). It is designed to interlink the domestic FPSs of its founding member countries that are Malaysia, Singapore, Thailand, India and the Philippines.
After signing the agreement, RBI Governor Shaktikanta Das shared in an interview that in his opinion the biggest benefit of the project is that it will make “cross-border payments much faster and less expensive”. He believes it will also lead to “greater international cooperation between countries to speed up cross-border digital transactions at a lower cost”. He has further expressed hope for the reduction of costs in line with the World Bank’s assessment. This initiative involves BIS Innovation Hub which aims to collaborate multi-laterally to increase payment efficiency and speed. This will result in benefits for person-to-person and person-to-merchant transactions.
On June 30, the founding member countries signed an agreement in Basel, Switzerland which marks the official launch of the project. The participating central banks are Bank Negara Malaysia (BNM), Bank of Thailand (BOT), Bangko Sentral ng Pilipinas (BSP), the Monetary Authority of Singapore (MAS), and the Reserve Bank of India (RBI). The initiative is slated to go live by 2026 when the platform will revolutionise cross-border retail transactions by making it faster and efficient. In the near future, the platform will further accommodate other countries as well to expand its reach.
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