The Reserve Bank of India (RBI) joined Project Nexus, which aims to create a multilateral cross-border instant payment system (IPS) by 2026. Conceptualized in 2022 by the Bank for International Settlements (BIS), Project Nexus was the first project in the payments sector from its innovation hub.
Though RBI has collaborated with seven countries to link the Unified Payments Interface (UPI) for bilateral payments, this is the first time it has joined a multilateral project, and will connect a potentially large user base
to UPI.
Project Nexus is designed to connect the Faster Payment Systems of four Association of Southeast Asian Nations (ASEAN) countries—Malaysia, the Philippines, Singapore, Thailand—and India and has the potential to add more countries. The five participating countries will be the founding members and first movers of this platform, and have signed an agreement with BIS to this effect in Basel, Switzerland.
The recently completed third phase of Project Nexus involved the participation of the central banks of the four ASEAN nations, domestic IPS operators, and Bank Indonesia, which has special observer status. As part of its fourth phase, RBI will also join the project.
The platform creates an affordable instant payment system, serving as an alternative to global instant payment players that have high transaction costs. It aims to lower costs and expedite international remittances between countries, promoting financial inclusion, economic integration, and scalability, thereby contributing to the G20 Roadmap for Enhancing Cross-border Payments.
Project Nexus standardizes domestic IPS connections, allowing operators to make one connection to Nexus instead of custom connections to each country. Thus, the IPS is connected to all the countries in the network.
To manage the live implementation, the participating central banks and IPS operators will work toward establishing a new entity called the Nexus Scheme Organization, owned by central banks, the IPS operators or both. Finally, BIS will move toward a technical advisory role to enhance cooperation among its members and participants.