RBI, ASEAN countries to create platform to facilitate cross-border retail payments

The Reserve Bank of India (RBI) has announced its participation in Project Nexus, a multilateral initiative aimed at creating a platform to facilitate instantaneous cross-border retail payments.

The project, conceptualized by the Innovation Hub of the Bank for International Settlements (BIS), seeks to interlink India’s Fast Payments System (FPS) – the Unified Payments Interface (UPI), and four ASEAN countries - Malaysia, Philippines, Singapore, and Thailand. 

The collaboration aims to enhance the international reach and efficiency of Indian payment systems, specifically the Unified Payments Interface (UPI).

Which countries are involved?

India, Malaysia, the Philippines, Singapore, and Thailand are among Project Nexus's founding members and first movers. An agreement formalizing this collaboration was signed on June 30, 2024, in Basel, Switzerland.

The signatories were the BIS and the central banks of the involved countries: Bank Negara Malaysia (BNM), Bank of Thailand (BOT), Bangko Sentral ng Pilipinas (BSP), Monetary Authority of Singapore (MAS), and the Reserve Bank of India. Indonesia, which has been part of the initiative from the beginning stages, continues to be involved as a special observer.

Beneficial for cross-border P2P and P2M payments

The RBI has highlighted that while bilateral collaborations between India's UPI and other countries' FPSs have been beneficial for cross-border person-to-person (P2P) and person-to-merchant (P2M) payments, a multilateral approach will further boost the international adoption and efficiency of these systems.

The Nexus platform aims to make retail cross-border payments more efficient, faster, and cost-effective, thereby providing significant advantages over the current bilateral arrangements.

The platform is expected to be operational by 2026. Once live, Nexus will play a crucial role in streamlining and enhancing the efficiency of cross-border retail payments.

Notably, the Nexus platform is designed to be scalable and can be extended to include more countries in the future.