Nexus, a project under the BIS Innovation Hub (BISIH), aims to enhance cross-border payments by leveraging the success of domestic instant payment systems. It focuses on improving the speed, affordability, transparency, and accessibility of cross-border transactions.
Nexus simplifies the connection of multiple instant payment systems within a distributed network using a standardized and multilateral approach. While each Instant Payment System (IPS) initially invests time and resources to connect to Nexus, this effort is a one-time endeavor, eliminating the need to repeat the process for every new cross-border connection.
Nexus caters to various payment use cases, including person-to-person (P2P), business-to-person, and person-to-business transactions. In 2022, the Nexus team successfully developed a working prototype to interconnect the test systems of three established IPS:
- The Eurosystem’s TARGET Instant Payment Settlement (TIPS) system, operated by Banca d’Italia on behalf of the Eurosystem and overseen by the European Central Bank.
- Malaysia’s Real-time Retail Payments Platform (RPP), operated by Payments Network Malaysia (PayNet) and overseen by Bank Negara Malaysia.
- Singapore’s Fast and Secure Transfers (FAST) payment system, operated by Banking Computer Services (BCS) and overseen by the Monetary Authority of Singapore.
The Nexus proof of concept demonstrated the technical feasibility of multilateral IPS connections, offering substantial potential benefits to individuals and businesses worldwide. Overcoming several challenges, the project addressed the significant variations in IPS designs and proxy schemes. Instead of pushing for a single standardized design, Nexus advocates accommodating these differences through tools supporting technical interoperability, such as the ISO 20022 standard for message formats and APIs. Additionally, it promotes business interoperability by establishing cross-border schemes that provide clear guidelines for IPS interactions with one another.
Nexus efficiently handles diverse addressing formats by dynamically providing Payment Service Providers (PSPs) with the relevant addressing and proxy formats for a specific country when initiating payments to that destination. This approach enables domestic proxies to be mapped to account numbers for cross-border payments.
Notably, the Nexus gateways developed during the proof of concept phase were constructed entirely using open-source components.
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