The Bank for International Settlements and the Monetary Authority of Singapore have published a blueprint for the multilateral linking of domestic real-time payement systems across borders.
The blueprint builds on the bilateral linkage between Singapore's PayNow and Thailand's PromptPay, launched in April 2021, and benefits from the experience of the National Payments Corporation of India's (NPCI) development and operation of the Unified Payments Interface (UPI) system.
Titled Project Nexus, the model envisages the creation of 'Nexus Gateways' that serve to coordinate compliance, foreign exchange conversion, message translation and the sequencing of payments among all participants.
This is complemented by an overarching Nexus Scheme that sets out the governance framework and rulebook for participating retail payment systems, banks and payment service providers to coordinate and effect cross-border payments through the network.
Benoît Cœuré, head of the BIS Innovation Hub, says: "Project Nexus is trying to achieve the equivalent of internet protocols for payments systems. That means creating a model through which any country can join by adopting certain technical and governance requirements."
Under the Nexus blueprint, participating countries will only need to adopt the Nexus protocols once to gain access to the broader cross-border payments network. This removes the need for countries to negotiate payment linkages with each jurisdiction on a bilateral basis.
Andrew McCormack, head of the BIS Innovation Hub Singapore Centre comments: "Country-to-country and regional payment connections already exist. But they require significant coordination efforts, which increase exponentially with more participants. Three countries require three bilateral links but 20 countries would require 190 bilateral links."