RBI and ASEAN to launch instant cross-border payment platform

Initiative to enhance retail payment efficiency among member countries

July 3, 2024

The RBI is working bilaterally to link India’s Fast Payments System, UPI, with the fast payment systems of ASEAN countries for seamless cross-border transactions

India has joined Project Nexus to connect fast payment systems of founding member countries, including Malaysia, the Philippines, Singapore, and Thailand

An agreement was signed in Basel, Switzerland, and the platform is expected to be operational by 2026

The platform aims to address the high costs of cross-border transactions by reducing dependency on a few dominant entities

The Reserve Bank of India (RBI) and ASEAN countries are set to create a platform enabling instant cross-border retail payments. The RBI will collaborate with individual member states to develop the necessary systems. This initiative aims to link India’s Unified Payments Interface (UPI) with the fast payment systems of ASEAN countries, facilitating seamless cross-border transactions.

India has joined Project Nexus, a multilateral effort by the Bank for International Settlements (BIS), to connect the fast payment systems of Malaysia, the Philippines, Singapore, and Thailand. The agreement was signed in Basel, Switzerland, with Indonesia participating as a special observer. The platform is expected to be operational by 2026, enhancing cross-border retail payments’ efficiency, speed, and cost-effectiveness.

The RBI has highlighted the high costs associated with current cross-border transactions, dominated by a few entities, and aims to reduce these costs through the new platform. For example, the World Bank estimates a 6% cost for small-value remittances. Following the successful launch of a real-time payment linkage with Singapore and potential plans with Japan, the RBI is poised to expand global payment connectivity, making significant strides in financial integration.

Source: Economic Times

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