- Nexus is a BIS Innovation Hub project that aims to improve cross-border payments by connecting multiple domestic Instant Payment Systems (IPS) around the world.
- This is the first BIS Innovation Hub project in the area of ​​payments, which is moving towards live implementation. BIS will play an advisory role as Project Nexus sets up its operational scheme and opens up to potential new participants around the world.
- BIS will assist central banks and IPS operators in India, Malaysia, the Philippines, Singapore and Thailand to work on live implementation in the next phase, with Bank of Indonesia as a special observer.
The Bank for International Settlements (BIS) and its partners announced today that they have completed a comprehensive plan for the third phase of Project Nexus, which will enable ready participants to work on the next phase of seamlessly connecting their instant payment systems.
In the fourth phase, Bank Negara Malaysia, Bangko Sentral ng Pilipinas, Monetary Authority of Singapore, Bank of Thailand and domestic IPS operators – who collaborated in the third phase – will join and join the Reserve Bank of India, expanding the potential user base to India. Unified Payments Interface (UPI), the largest IPS in the world.
Bank Indonesia (BI) will continue to be associated with the project with special observer status. BI participated in the third phase and will continue in this capacity to monitor the project in the next phase of its development.
Nexus is designed to standardize the way home IPSs interconnect. Instead of the IPS operator building its own connection for each new country it connects to, the operator only needs one connection to the Nexus device. This single connection would allow IPS to reach all other countries in the network.
Even with the first wave of connected countries, Nexus has the potential to connect a market of 1.7 billion people worldwide, allowing them to make instant payments to each other easily and cheaply.
AgustÃn Carstens, Director General of BIS
The conclusions and lessons learned from the third phase of Nexus are described in a report released today. This is complemented by a detailed set of scheme rules and technical implementation guides, as well as ISO 20022 reporting specifications, which are available to central banks on request.
To facilitate live implementation, partner central banks and IPS operators have agreed to work to establish a new entity, the Nexus Scheme Organization (NSO), which will be responsible for the administration of the Nexus Scheme and continue its mission to achieve instant cross-border payment at scale.
The NBU will be wholly owned by the central banks and/or IPSs of the participating countries, depending on the specific domestic structures. In developing the plan in the third phase of Nexus, BIS fulfilled its role of supporting central banks in finding innovative solutions for the provision of public goods and one of its key commitments under the G20 Roadmap for Enhancing Cross-border Payments.
Although BIS will not own or operate the NSO, it will continue its support by playing a technical advisory role as participating countries work to bring Nexus devices into service. It will also facilitate collaboration between members and the entry of new participants, helping to realize Nexus’ global ambitions.
Notes for editors
This work builds on an earlier development phase in which the Nexus prototype was used to successfully link test versions of three established IPSs: the Eurosystem’s TARGET Instant Payment Settlement (TIPS), Malaysia’s Retail Real-Time Payment Platform (RPP) and Singapore’s Fast and Secure payment system Transfers (FAST). (This work is described in Annex 1 of the new report.)
In November 2022, Bank Indonesia, Bank Negara Malaysia, Bangko Sentral ng Pilipinas, MAS and the Bank of Thailand signed a Memorandum of Understanding (MoU) on cooperation in the field of regional payment connectivity, which highlights cooperation efforts in the region towards the establishment of cross-border payment connectivity. including fast payment links. Since the signing of the MoU, the Central Bank of Brunei Darussalam, the Bank of the Lao People’s Democratic Republic and the State Bank of Vietnam have joined the initiative.
The BIS Innovation Hub launched the project in 2022, and its Singapore Center has worked with current partners over the past year to develop a comprehensive management scheme and framework, commercial model and technology plan.
Consultations have also taken place with central banks, standard setting bodies, IPS operators and commercial entities worldwide to verify that Nexus is scalable and interoperable beyond current participants. Nexus is one of many exploratory projects undertaken by the BIS Innovation Hub. Together with the BIS Committee on Payments and Market Infrastructures, it also contributes to the G20 plan to strengthen cross-border payments. Highlights the Roadmap connecting IPS as a key objective and Nexus as a priority action that could have a significant impact on speed, cost, transparency and access to cross-border payments.