Nexus: enabling instant cross-border payments
Conclusions from a technical proof of concept between the Eurosystem, Malaysia and Singapore.
Nexus is a blueprint to connect multiple instant payment systems. It aims to enable cross-border payments in less than 60 seconds.
Nexus is a model for connecting multiple national payment systems into a cross-border network that could enable international payments to happen in seconds.
In over 60 countries today domestic payments reach their destination in seconds at near-zero cost to the sender or recipient. This is thanks to the growing availability of instant payment systems (IPSs).
Cross-border payments could be significantly improved by linking up domestic instant payment systems (IPSs)1 in multiple countries. Nexus provides a blueprint for doing this.
In 2022, the BIS IH Singapore Centre built a working prototype of Nexus and used it to connect the test systems of three established IPSs:
- The Eurozone's TARGET Instant Payment Settlement (TIPS) system, operated by Bank of Italy on behalf of the Eurosystem and overseen by the European Central Bank.
- Malaysia's Real-time Retail Payments Platform (RPP), operated by Payments Network Malaysia (PayNet) and overseen by Central Bank of Malaysia.
- Singapore's Fast and Secure Transfers (FAST) payment system, operated by Banking Computer Services (BCS) and overseen by the Monetary Authority of Singapore.
The Nexus proof of concept demonstrated that connecting IPSs multilaterally is technically feasible and can have significant potential benefits for individuals and businesses across the world.
The overview report is accompanied by detailed technical documentation, which includes guides for each type of participant in Nexus. The Nexus blueprint is comprehensive but not final and feedback is welcome2.
In the next phase of this work, BISIH Singapore Centre will collaborate with the central banks and payment system operators of Indonesia, Malaysia, the Philippines, Singapore and Thailand as they work towards connecting their domestic payment systems, using the Nexus blueprint as the foundation.
Andrew McCormack, Head, BIS Innovation Hub Singapore Centre, discusses Project Nexus, a blueprint for connecting multiple national payment systems into a cross-border network that could enable international payments to happen almost instantaneously. He talks about the successful completion of Phase II, which involved building a working prototype to link three established payment systems, and looks forward to Phase III, which will see five Southeast Asian countries work towards connecting their domestic payment systems. He also talks about the challenges facing the project as well as its ultimate aims. He touches upon innovations in the financial space and looks back on the major insights he gained in his time as head of the Singapore Centre.
1 Often known as "fast" or "real time" payment systems.
2 The Nexus team can be contacted at singapore.centre@bisih.org