How will RBI's Project Nexus Benefit Indians in Foreign? Know What is Project Nexus and Countries Associated

In order to make sending money across borders instantly RBI has joined hands with Project Nexus, a venture of Bank for International Settlements (BIS) Innovation Hub.This initiative aims to expand Indian payment systems globally, making international payments safer and more convenient.

Project Nexus is a global initiative that is working on enabling instant cross-border retail payments using interlinking domestic Financial Presence Services (FPSs). Partnering in the project is a strategic step taken by RBI towards expanding the reach of UPI internationally. 

What is Project Nexus?

Project Nexus was initiated by the Innovation Hub of the Bank for International Settlements (BIS) to introduce innovative practices in the field of international payments. 

The primary objective of Nexus is to enhance foreign exchange transactions by seamlessly merging several local Instant Payment Systems (IPS). With this assurance, Project Nexus will be the BIS Innovation Hub's first real implementation-focused project for the payments sector. 

The project's infrastructure facilitates international money transfers in an open, rapid, and secure manner, enabling connection for both Person-to-person (P2P) and Person-to-Merchant (P2M) payments.

How will Project Nexus Benefit Payment System?

Project Nexus simplifies global instant payments by standardizing connectivity methods worldwide. Previously, each country's payment system required unique links to connect with others. 

With Nexus, all systems can connect through a single platform, making integration faster, more efficient, and cost-effective. This streamlines transactions, often completing them in under 60 seconds, reducing costs, and enhancing user satisfaction and adoption.

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Founding Members of Nexus

Developed by the BIS Innovation Hub, Project Nexus aims to connect the Financial Presence Services (FPSs) of India and four ASEAN nations—Malaysia, the Philippines, Singapore, and Thailand. These five countries will be the founding members and early adopters of the platform.

The BIS and the central banks of the founding nations—Bank Negara Malaysia (BNM), Bank of Thailand (BOT), Bangko Sentral ng Pilipinas (BSP), Monetary Authority of Singapore (MAS), and the Reserve Bank of India—signed a formal agreement on June 30, 2024, in Basel, Switzerland, to initiate this collaboration. Indonesia is acting as a special observer in the project and has been involved since its beginning.

Eventually, the Nexus platform may be expanded to include more nations. It is anticipated that the platform will launch in 2026. When fully operational, Nexus will significantly contribute to the effectiveness, speed, and cost-effectiveness of retail cross-border payments.

Other Initiatives Taken by RBI

The Reserve Bank of India (RBI) has been working with international partners to link India's Unified Payments Interface (UPI) with fast payment systems (FPSs) of other countries.

1. Global Expansion of UPI: As per the RBI Annual Report, RBI and NPCI International Payments (NIPL) are collaborating to extend UPI services to 20 countries by FY29.
2. MoU with Central Bank of UAE: In July 2023, RBI signed a Memorandum of Understanding (MoU) with the Central Bank of the UAE (CBUAE) to connect their payment infrastructures, enhancing bilateral financial transactions.
3. RuPay and UPI in Mauritius: In February 2024, India launched RuPay cards and enabled UPI connectivity with Mauritius. This initiative allows Indian tourists in Mauritius to use UPI apps for payments, and Mauritian travelers in India can do the same.
4. UPI Lite: Recently, RBI introduced auto-replenishment for UPI Lite wallets under its e-mandate framework, simplifying and automating the recharge process for users.

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