RBI signs pact with 4 ASEAN countries for instant cross-border retail payments

India has joined Project Nexus, a multilateral international initiative that aims to enable instant cross-border retail payments through interlinking payment systems of various countries.

Nexus was conceptualised by the Innovation Hub of the Bank for International Settlements (BIS) to connect the 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, Asian News International (ANI) reported on Monday.

As per a statement from the Reserve Bank of India (RBI), an agreement was 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 on Sunday (30th June, 2024), in Basel, Switzerland.

Indonesia, which has been involved from the early stages, continues to be involved as a special observer.

The RBI statement said that the platform may be extended to more countries in the future.

The platform is expected to go live by 2026. Once functional, Nexus will play a key role in making retail cross-border payments efficient, faster, and more cost-effective.

RBI has been collaborating bilaterally with various countries to link India’s digital public infrastructure — Unified Payments Interface (UPI) — with their respective counterparts for cross-border payments.

UPI is India’s mobile-based fast payment system, which facilitates customers to make round-the-clock payments instantly, using a Virtual Payment Address (VPA) created by the customer.

Among others, a key emphasis of the Indian government has been on ensuring that the benefits of UPI are not limited to India only; other countries, too, benefit from it. 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 per cent in 2023. Today, India accounts for nearly 46 per cent of the world’s digital transactions (as per 2022 data).