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BIS Plans to Expand World’s Instant Payment Systems

global payments, cross-border payments

The Bank for International Settlements (BIS) wants to expand the world’s largest instant payment system (IPS).

BIS announced Monday (July 1), that it had completed the blueprint for the third phase of its Project Nexus, aimed at connecting the instant payment systems of several central banks.

In phase four of that project, those banks — Bank Negara Malaysia, Bangko Sentral ng Pilipinas, the Monetary Authority of Singapore, the Bank of Thailand and domestic IPS operators — will be joined by the Reserve Bank of India, “expanding the potential user base to India’s Unified Payments Interface (UPI), the world’s largest IPS,” BIS said.

According to a news release, Nexus is aimed at standardizing the way domestic IPS connect with each other. Instead of a payment system creating custom connections for every new country to which it interacts, the operator would just have to make one connection to Nexus, which would in turn let the IPS reach all other countries in the network.

“Even with just the first wave of connected countries, Nexus has the potential to connect a market of 1.7 billion people globally, allowing them to make instant payments to each other easily and cheaply,” said Agustín Carstens, general manager of the BIS.

Elsewhere on the instant payments front, PYMNTS examined the use of these payments in the transportation industry in a conversation last month with Cheryl Gurz, vice president, RTP product development at The Clearing House (TCH).

“For these businesses, instant payments are really about precision,” said Gurz, noting the advent of instant payment systems in transportation marks a major shift in how transactions are being conducted, particularly among small- to medium-sized businesses.

Gurz explained that the decentralized nature of the transportation industry leads to uncertainty around cash flows. But with the TCH’s RTP network, operating 24/7, businesses can make payments at any time, ensuring they line up perfectly with their cash flow needs.

“They’re out on the road, it’s 10 p.m. on the west coast, and they have a payment due the next morning. And the east coast supplier, they can make that payment and within 30 seconds and it’s settled. So they don’t have to worry about timing, they don’t have to worry about banker’s hours,” Gurz said.