BIS Singapore publish blueprint for retail payments network

The Bank for International Settlements Innovation Hub in Singapore has published a proposed blueprint for enhancing global payments network connectivity.

The blueprint, also supported by the Monetary Authority of Singapore (MAS), aims to improve network connectivity via multilateral linkages of countries’ national retail payment systems.

Titled Project Nexus, the proposal outlines how countries can fully integrate their retail payment systems onto a single cross-border network, allowing customers to make cross-border transfers instantly and securely via their mobile phones or internet devices.

The Nexus blueprint comprises two main elements:

• Nexus Gateways, to be developed and implemented by the operators of participating countries’ national payment systems, will serve to coordinate compliance, foreign exchange conversion, message translation and the sequencing of payments among all participants. These gateways will be predicated on a common set of technical standards, functionalities and operational guidelines set out within the proposal.

• 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.

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.

“Country-to-country and regional payment connections already exist,” said Andrew McCormack, head of the BIS Innovation Hub Singapore Centre. “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.”

Arif Khan, chief digital officer at NPCI, said: “This blueprint will bring like-minded regulators and instant payments operators along with global bodies like the G20 and the Committee on Payments and Market Infrastructures (CPMI) together to make real-time cross-border payments a reality in the next two to four years.”

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