Philippines, 4 Asian countries to link instant payment systems

Philippines, 4 Asian countries to link instant payment systems

Story by Keisha Ta-Asan 

Philstar Global

07 July 2024

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) and its global partners have completed the blueprint for the third phase of its Nexus Project and is now preparing for the final phase, which includes the live implementation of cross-border payments connectivity globally.

The BSP, the Bank for International Settlements (BIS) and four other Asian central banks will now work on the next stage of connecting their instant payment systems (IPS) seamlessly.

“Phase four will see the Central Bank of Malaysia, the BSP, the Monetary Authority of Singapore, the Bank of Thailand and domestic IPS operators – who worked together in phase three – joined by the Reserve Bank of India, expanding the potential user base to India’s Unified Payments Interface (UPI), the world’s largest IPS,” it said.

Bank of Indonesia will continue to be a special observer to the project. The Indonesian central bank took part in phase three and will continue in this capacity to follow the project in the next stage of its development.

To facilitate live implementation, the central banks and IPS operators have agreed to establish the Nexus Scheme Organization (NSO). The NSO will be responsible for managing Nexus.

“The NSO will be wholly owned by the central banks and/or IPS in participating countries, depending on the specific domestic structures,” it said.

BSP Governor Eli Remolona Jr. said the central bank would continue to work with the Philippine payments industry, the BIS and other interested countries in the live implementation of Project Nexus.

“Empowered by a shared vision of efficient and reliable cross-border payments, the collaboration between the BIS and ASEAN central banks has been rather effective, and I’d like this to continue,” Remolona said.

“Central banks have always played a role in payments as a public good. With Nexus, this role will be extended to cross-border payments, maximizing the network effects,” Remolona said.

Remolona added that the Nexus Project would provide overseas Filipinos a cheaper and faster way to send money back home. It will also facilitate the globalization of Filipino small and medium scale enterprises.

Nexus is designed to standardize the way domestic IPS connect to one another. The IPS operator only needs to make one connection to Nexus. This single connection would enable the IPS to reach all other countries in the network.

The BIS will play an advisory role as Project Nexus sets up an operational scheme and opens to potential new participants across the globe.

It will also facilitate cooperation among central banks and IPS operators of India, Malaysia, the Philippines, Singapore and Thailand as they work towards live implementation.

BIS general manager Agustin Carstens said the Nexus Project could connect a market of 1.7 billion people globally, providing them a means to do instant payments in a faster and cheaper way.

“This is the first BIS Innovation Hub project in which central banks are moving towards a live phase together with instant payment providers,” he said.

“When implemented, it will greatly enhance cross-border payments in line with both the G20 cross-border payments program and our mission to develop public goods in the technology space to support central banks and improve the functioning of the financial system,” he added.