In a significant move to revolutionize cross-border retail payments, India has joined Project Nexus, an international initiative aiming to interlink the payment systems of multiple countries for instant transactions. This multilateral project, conceptualized by the Innovation Hub of the Bank for International Settlements (BIS), includes India and four ASEAN nations—Malaysia, the Philippines, Singapore, and Thailand—as founding members.
The Reserve Bank of India (RBI) announced the agreement signed by the BIS and the central banks of the founding countries—Bank Negara Malaysia (BNM), Bank of Thailand (BOT), Bangko Sentral ng Pilipinas (BSP), Monetary Authority of Singapore (MAS), and the RBI. Indonesia remains involved as a special observer, highlighting its early engagement with the project.
The Nexus platform, expected to go live by 2026, aims to make cross-border retail payments faster, more efficient, and cost-effective. This initiative could potentially expand to include more countries in the future, according to the RBI statement.
India has been actively working to link its digital public infrastructure, specifically the Unified Payments Interface (UPI), with various countries for seamless cross-border payments. While bilateral agreements have been beneficial, the multilateral Nexus project promises to extend the international reach of Indian payment systems even further.
Digital payments in India are witnessing unprecedented growth, with the UPI system playing a crucial role. UPI, a mobile-based fast payment system, allows customers to make instant, round-the-clock payments using a Virtual Payment Address (VPA). The system has gained immense popularity, contributing to India’s near 80% share in digital payments and accounting for almost 46% of global digital transactions as of 2022.
The Indian government is committed to extending the benefits of UPI beyond national borders. Partnerships have already been established or are in progress with countries such as Sri Lanka, Mauritius, France, the UAE, and Singapore, aiming to enhance fintech and payment solutions internationally.
As Project Nexus progresses, it is poised to significantly enhance the efficiency and accessibility of retail cross-border payments, marking a major advancement in global financial connectivity.
