India has announced joining Project Nexus, a multilateral international platform that aims to enable instant cross-border retail payments through interlinking payment systems of various countries.
The Innovation Hub of the Bank for International Settlements (BIS) conceptualized Project Nexus. It aims to connect the payment systems of four ASEAN countries including Malaysia, Philippines, Singapore, Thailand, and most recently India. In addition, India and the four ASEAN countries will be the founding members and first-mover countries of the cross-border retail payment platform.
The Reserve Bank of India (RBI) also revealed in a statement that it signed an agreement on June 30, 2024, with the BIS and the central banks of the founding countries in Basel, Switzerland:
- Bank Negara Malaysia (BNM)
- Bank of Thailand (BOT)
- Bangko Sentral ng Pilipinas (BSP)
- Monetary Authority of Singapore (MAS)
Promoting efficiency and speed
Indonesia, which has been a part of the project from the early stages, continues to act as a special observer. For its part, India’s central bank also stated that the cross-border retail payment platform may extend to more countries in the future.
The platform will likely go live by 2026. Once functional, Nexus will play a key role in making retail cross-border payments efficient, faster and more cost-effective.
India’s central bank has been collaborating bilaterally with various countries to link India’s digital public infrastructure with its respective counterparts for cross-border payments.
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India’s UPI
Notably, the Unified Payments Interface (UPI) is India’s mobile fast payment system. The system facilitates payments instantly using a virtual payment address (VPA) that the customer creates. India’s government has emphasized the importance of ensuring that the benefits of UPI are not limited to India only.
So far, Sri Lanka, Mauritius, France, UAE, and Singapore, among others, have partnered or intended to partner with India on emerging fintech and payment solutions.
The share of UPI in digital payments in India has reached close to 80 percent in 2023. Today, India accounts for nearly 46 percent of the world’s digital transactions.
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