The BIS Innovation Hub Singapore Centre and partners today announced the successful connection of the test versions of three established IPS using the Nexus model and outlined the next phase of the project to work on the real-world potential of a multilateral network that could be scaled up across more countries.
- To enhance cross-border payments, the BIS Innovation Hub Singapore Centre developed the Nexus concept of a first-of-its-kind multilateral network connecting multiple domestic instant payment systems (IPS).
- Nexus prototype successfully connected the test IPS of the Eurosystem, Malaysia and Singapore, allowing payments to be sent across the three using only mobile phone numbers.
- In the next phase, BIS and the central banks of Indonesia, Malaysia, the Philippines, Singapore and Thailand will jointly work towards connecting their domestic IPS through Nexus.
The year-long collaboration included the Bank of Italy, Central Bank of Malaysia (BNM) and Monetary Authority of Singapore (MAS), plus the payment systems operators PayNet and Banking Computer Services (BCS). Test payments were initiated using only the mobile phone numbers or the recipients’ company registration numbers via the Eurosystem’s TARGET Instant Payment Settlement (TIPS), Malaysia’s Real-time Retail Payments Platform (RPP) and Singapore’s Fast and Secure Transfers (FAST) payment system.
The Nexus report , published today, provides details on the early experiments and technical specifications for the multilateral interlinking of payment systems. The success of the experiment paves the way for the BIS Innovation Hub Singapore Centre to explore the practical applications of a distributed multilateral network.
Nexus aims to support the G20 priorities of improving the cost, speed, access and transparency of cross-border payments by connecting domestic IPS across multiple countries through a standardised and multilateral approach. It is designed to accommodate differences between IPS, rather than trying to homogenise them.
For the next phase of the project – in line with their November 2022 Memorandum of Understanding on Cooperation in Regional Payment Connectivity – Bank Indonesia (BI), BNM, Bangko Sentral ng Pilipinas (BSP), MAS and the Bank of Thailand will leverage experiences from Phase I and Phase II of the project towards connecting their countries’ IPS and facilitate cross-border transactions across a combined population of about 500 million people.
The Innovation Hub’s Singapore Centre will collaborate with these central banks to facilitate their design processes, as they aim to connect their domestic payment systems.
“I am thrilled at our success in connecting three national payment systems and the potential this indicates for Nexus. It paves the way for further development, and we look forward to collaborating with our partner central banks on the next phase of the project,” said Cecilia Skingsley, Head of the BIS Innovation Hub.
“The successful Nexus prototype between Singapore, Malaysia and the Eurosystem is a breakthrough that proves the technical viability of multilateral instant payment systems connectivity. The next phase of work by the central banks of Singapore, Indonesia, Malaysia, Philippines and Thailand will be crucial in laying the foundations for future implementation at scale. ASEAN’s progress in regional payments connectivity puts us in good stead to realise Nexus’ vision for a global instant payments network,” Sopnendu Mohanty, Chief FinTech Officer, MAS, said.
“Improving speed and transparency of retail cross border payments, while reducing their costs, is at the core of the G20 agenda. Banca d’Italia stands by this commitment. The success in connecting three payment systems and the potential this indicates for Nexus, are a key step forward in this direction,” said Bank of Italy Deputy Governor, Piero Cipollone.
“We congratulate the BIS Innovation Hub Singapore Centre and its partners from Italy, Malaysia and Singapore for the successful completion of the Project Nexus Proof-of-Concept. The second phase enabled us to harness the potential of multilateral connectivity of fast payment systems among the first-mover countries in the ASEAN. Building on this momentum, we look forward to working with the BIS and our counterparts in the ASEAN in the enhancement of cross-border real-time retail payments that can facilitate financial integration within the region. With an expanding digital sector and remittances remaining to be important drivers of growth, the Philippines remains committed to its pursuit of necessary reforms for a more seamless global payments landscape. We believe this project is a concrete step in this direction,” said BSP Governor Felipe M. Medalla.
“Encouraged by the commitment of cooperation in Regional Payment Connectivity sealed during the G20 Indonesia Leaders’ Summit in November 2022, the next phase of Project Nexus will become a key step of our joint work towards wider payments connectivity. Our objective remains to accelerate regional financial inclusion as well as to implement faster, cheaper, more transparent and accessible cross border payment systems that will benefit our nations,” said BI Governor, Perry Warjiyo.
“Our vision is to realise the shared aspiration for faster, cheaper and more accessible cross-border payments. We are pleased to participate in Project Nexus Phase 3 to realise that vision. Building on the success of the Nexus proof-of-concept, we are well-placed to accelerate the development of this next-generation payment connectivity model to bring significant benefits to the people of Malaysia and ASEAN,” BNM Assistant Governor Suhaimi Ali said.
“Project Nexus is revolutionising cross-border payments by linking multiple fast payment systems to create a globally scalable network. The Bank of Thailand is pleased to be a key part of this project, leveraging our experiences in developing Thailand and Singapore’s groundbreaking ‘PromptPay-PayNow’ linkage. Nexus aims to deliver a fast, efficient, and low-cost alternative for cross-border payments, with user experiences similar to those in domestic payments,” said Siritida Panomwon Na Ayudhya, Assistant Governor, Bank of Thailand.
Looking ahead, the BIS and the five central banks envisage that Nexus could eventually be implemented globally. To achieve this, they will aim to establish a Global Advisory Panel of central banks and payment system operators to advise on the project’s development beyond the Southeast Asian region. The Bank of Italy and the European Central Bank will be invited to join this panel.
The BIS also plans to run a webinar on the Nexus proof of concept on 5 April. To register click here .