The Reserve Bank of India (RBI) is taking significant steps to enhance cross-border retail payments by collaborating with various ASEAN countries. This initiative aims to link India’s Fast Payments System (FPS) – the Unified Payments Interface (UPI) – with the fast payment systems of ASEAN nations. This collaboration will enable seamless Person to Person (P2P) and Person to Merchant (P2M) payments across borders, benefiting both India and its partner countries.
“Reserve Bank of India has been collaborating bilaterally with various countries to link India’s Fast Payments System (FPS) – the Unified Payments Interface (UPI), with their respective FPSs for cross-border Person to Person (P2P) and Person to Merchant (P2M) payments. While India and its partner countries can continue to benefit through such bilateral connectivity of Fast Payment Systems, a multilateral approach will provide further impetus to our efforts in expanding the international reach of Indian payment systems,” RBI said in a release.
The bank has also joined Project Nexus, a multilateral international initiative conceptualised by the Innovation Hub of the Bank for International Settlements (BIS). The project will enable instant cross-border retail payments by interlinking domestic FPSs.
Project Nexus aims to connect the fast payment systems of four ASEAN countries – Malaysia, Philippines, Singapore, and Thailand; and India, who would be the founding members and first mover countries of this platform.
An agreement to this effect was signed by the BIS and the central banks of the founding countries i.e., Bank Negara Malaysia (BNM), Bank of Thailand (BOT), Bangko Sentral ng Pilipinas (BSP), Monetary Authority of Singapore (MAS), and Reserve Bank of India on June 30, 2024, in Basel, Switzerland. Indonesia, which has been involved from the early stages, continues to be involved as a special observer.
“Governor, RBI @DasShaktikanta participated in the signing ceremony of Nexus, an initiative of the Bank for International Settlements Innovation Hub (BISIH), to interlink the Fast Payment System (FPS) of multiple jurisdictions. UPI of India and FPSs of Malaysia, Philippines, Singapore and Thailand will be interlinked through Nexus. Indonesia will also join this platform in future,” RBI tweeted.
The platform can be extended to more countries, going forward and is expected to go live by 2026. Once functional, Nexus will play an important role in making retail cross-border payments efficient, faster, and more cost effective.