UPI To Be Linked With Payment Systems Of 4 ASEAN Nations For Instant Cross-Border Payments

The Reserve Bank of India (RBI) has teamed up with the Bank for International Settlements (BIS) and central banks from four ASEAN nations to launch Project Nexus, a multilateral initiative aimed at facilitating retail cross-border payments. 

Under the initiative, India’s Unified Payments Interface (UPI) will be linked with the respective Fast Payment Systems (FPS) of Malaysia, Philippines, Singapore, and Thailand to facilitate instant cross-border retail payments.

“An agreement to this effect 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 Reserve Bank of India — on June 30, 2024, in Basel, Switzerland,” the RBI said in a release.

The platform is expected to go live by 2026. Nexus was conceptualised by the Innovation Hub of the BIS, the statement said, adding that the platform can be extended to more countries later.

The pact is part of the RBI’s efforts to link UPI with the equivalent payment systems of other countries to facilitate instant cross-border person-to-person (P2P) and person-to-merchant (P2M) payments. 

While these bilateral connections have been beneficial, adopting a multilateral approach will significantly enhance the international reach of Indian payment systems and give further momentum to these efforts, the central bank said.

“Once functional, Nexus will play an important role in making retail cross-border payments efficient, faster, and more cost effective,” the RBI added. 

It was reported last year that the RBI was also in discussions with its counterparts in the US, Hong Kong and the Society for Worldwide Interbank Financial Telecommunications (SWIFT) for a fast and cost-effective digital cross-border settlement system using central bank digital currencies (CBDC).

Last year, the RBI signed a memorandum of understanding (MoU) with the Central Bank of the United Arab Emirates (CBUAE) to jointly conduct proof-of-concept and pilot(s) of bilateral CBDC bridge to facilitate cross-border CBDC transactions of remittances and trade, and enable innovation in the financial products and services segment.

In February 2023, India and Singapore announced the linkage of their real-time payment system linkage. 

Over the years, the National Payments Corporation of India (NPCI) has also signed agreements with a number of countries, including Peru and Namibia, to develop UPI-like payments systems.