The Bank for International Settlements (BIS) Innovation Hub Singapore Centre has developed a multi-national cross-border payments project set to connect multiple domestic instant payment systems (IPSs).
Project Nexus’ prototype successfully completed its first connection to the test IPS of the Eurosystem, Malaysia and Singapore and allowed payments to be sent across the three regions using mobile numbers or the recipients’ company registration numbers.
The joint effort of the last year included the Bank of Italy, Central Bank of Malaysia (BNM), Monetary Authority of Singapore (MAS), and payment systems operators PayNet and Banking Computer Services (BCS). Test payments were completed through 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.
“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,” Cecilia Skingsley, Head of the BIS Innovation Hub, said.
The project seeks to support the G20 priorities of improving the cost, access and transparency and enhancing the cost and speed of cross-border payments by connecting multiple domestic IPSs through a system that is designed to “accommodate differences… rather than homogenise them”.
“The successful Nexus prototype between Singapore, Malaysia and the Eurosystem is a breakthrough that proves the technical viability of multilateral instant payment systems connectivity,” Sopnendu Mohanty, Chief FinTech Officer, MAS, said.
“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.”
The next steps in the project align with the Memorandum of Understanding (MoU) on Cooperation in Regional Payment Connectivity signed in November 2022 by Bank Indonesia, BNM, Bangko Sentral ng Pilipinas (BSP), MAS and the Bank of Thailand, seeking to connect each country’s IPS to enable cross-border transactions across a combined population of approximately 500 million people.
“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,” BSP Governor Felipe M. Medalla said.
“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.”
“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,” BI Governor, Perry Warjiyo, said.
“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.”
“Our vision is to realise the shared aspiration for faster, cheaper and more accessible cross-border payments,” BNM Assistant Governor Suhaimi Ali said.
“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.”