Singapore, BIS Innovation Hub propose plan to enhance global real-time payments connectivity

29, Jul. 2021

BIS Innovation Hub and the Monetary Authority of Singapore have proposed a blueprint to facilitate fast cross-border payments. (Photo: BIS)
BIS Innovation Hub and the Monetary Authority of Singapore have proposed a blueprint to facilitate fast cross-border payments. (Photo: BIS)

By Celine Chen

SINGAPORE, NNA - The Monetary Authority of Singapore (MAS) and the Bank for International Settlements Innovation Hub Singapore Centre have proposed a blueprint for boosting global payments network connectivity via multilateral linkages of countries’ national retail payment systems.

Called "Project Nexus", the plan shows how countries can fully integrate their retail payment systems onto a single cross-border network, thus allowing people to make cross-border transfers instantly and securely via their mobile phones or internet devices.

In a press statement, Sopnendu Mohanty, chief fintech officer of MAS, which is Singapore’s central bank and integrated financial regulator, said, “To achieve significant cost reduction in cross-border payment transfers, enhancements must be made on two fronts: direct connectivity between domestic faster payment systems, and frictionless foreign exchange on shared common wholesale settlement infrastructures. The BIS Innovation Hub Singapore Centre is working on both. The Nexus project maps out a much-needed set of standards to achieve seamless cross-border payment systems connectivity.”

In the proposal, "Nexus Gateways", are to be developed and implemented by the operators of participating countries’ national payment systems. They will serve to coordinate compliance, foreign exchange conversion, message translation and the sequencing of payments among all participants.

These gateways will be established on the recommended common set of technical standards, functionalities and operational guidelines.

Also proposed is a "Nexus Scheme" that sets out the governance framework and rulebook for participating retail payment systems, banks and payment service providers to coordinate and effect cross-border payments through the network.

Under the Nexus blueprint, participating countries will only need to adopt protocols once to gain access to the broader cross-border payments network, hence doing away with the need to negotiate payment linkages with each jurisdiction on a bilateral basis.

Benoît Cœuré, head of the BIS Innovation Hub, said, “Project Nexus is trying to achieve the equivalent of internet protocols for payments systems. That means creating a model through which any country can join by adopting certain technical and governance requirements."

The Nexus blueprint was developed through extensive consultation with multiple central banks and financial institutions across the globe.

The model builds on the successful framework for the bilateral linkage between Singapore’s PayNow and Thailand’s PromptPay launched in April 2021 as well as the beneficial experience gained from the National Payments Corporation of India’s (NPCI) development and operation of the Unified Payments Interface (UPI) system.

"The blueprint can be built upon through continued research and engagement with regulators, payment operators, banks, and other industry participants collaborating towards a technical proof-of-concept," said the press statement.

Andrew McCormack, head of the BISIH Singapore Centre, said, “Country-to-country and regional payment connections already exist. But they require significant coordination efforts, which increase exponentially with more participants. Three countries require three bilateral links but 20 countries would require 190 bilateral links.”

Looking forward to the adoption of the model, Arif Khan, chief digital officer of NPCI, said, “This blueprint will bring like-minded regulators and instant payments operators along with global bodies like the G20 and the Committee on Payments and Market Infrastructures (CPMI) together to make real-time cross-border payments a reality in the next two to four years.”

Interested parties can give feedback on the technical report by contacting the Nexus team at

The Bank for International Settlements established the BIS Innovation Hub in 2019 to provide in-depth insights into critical trends in financial technology relevant to central banks.

It also studies the development of public goods to enhance the functioning of the global financial system apart from serving as a focal point for central bank experts collaborating on innovation.

Currently, there are BIS Hub centers in Hong Kong SAR, Singapore, Switzerland, London and Stockholm. More will open soon, in cities such as Toronto, with Frankfurt and Paris being considered.

The BIS has also formed a strategic partnership on a hub with the US Federal Reserve System in New York.

Benoît Cœuré said the expansion will help the BIS Innovation Hub to advance work on a broad range of issues of importance to the central banking community, such as digital currency and digital payments, cyber security, distributed ledger technology and artificial intelligence.

Ensuring the security of financial systems is of utmost importance today as more and more consumers and businesses are shifting to digital payments during the devastating COVID-19 pandemic which has spread throughout the world since last year.

In its annual economic report in June, BIS noted that the global recovery so far was incomplete and uneven, with some countries and sectors bouncing back quickly and others lagging.

The uneven recovery could whip up headwinds particularly for emerging market economies due to tighter financial conditions as advanced economies cross the transition more quickly.

"In the coming year, issues such as corporate insolvencies and capital and labor reallocation will come to the fore," BIS warned.

While swift and forceful action from central banks and governments has reduced the economic fallout from the pandemic, policymakers looking ahead to the next phase of the recovery must prepare for different but no less formidable challenges.

BIS said, "In the near term, flexible policy support is key to nursing the recovery. In the longer term, monetary and fiscal policies will need to re-establish safety margins, a complicated task given the unprecedented initial conditions and inadequate structural reforms."

The pandemic has unfortunately exacerbated income and wealth inequality. While monetary policy cannot influence its rising long-term trend, it can mitigate it by tackling macroeconomic instability in line with its mandate, said BIS.

Its report paints a central scenario for a recovery with a temporary increase in inflation and two more challenging scenarios.

In one scenario, a large fiscal stimulus and a drawdown of accumulated savings result in stronger growth but also higher inflation and a substantial tightening in global financial conditions. In the other, growth disappoints as the coronavirus proves harder to control.