In a major development for cross-border payments, Europe’s Target Instant Payment Settlement (TIPS) system will join Project Nexus, a global initiative spearheaded by the Bank for International Settlements (BIS). This project aims to connect domestic real-time payment networks across borders, creating a more efficient and streamlined financial ecosystem.
Project Nexus is designed to serve as a centralized hub, providing a single point of connection for instant payment networks around the world. By utilizing ISO 20022 message specifications and a purpose-built suite of APIs, Nexus will allow different countries’ payment systems to interoperate smoothly, facilitating faster and cheaper cross-border transactions.
Early Success and Expansion Plans
The decision by Eurosystem, which operates the Target Instant Payment Settlement (TIPS) system, to join Project Nexus follows the success of a proof-of-concept conducted in 2022. This initial phase linked the payment systems of Malaysia, Singapore, and the Eurosystem, demonstrating that cross-border instant payments could work seamlessly between these regions.
Since then, the BIS in Singapore has expanded its collaboration, working closely with the central banks and instant payment system (IPS) operators of Indonesia, Malaysia, the Philippines, Singapore, and Thailand. These countries are now actively evaluating the Nexus model as they move toward live implementation.
Future of Instant Payments in Europe
As part of its broader exploratory efforts to link TIPS with other fast payment systems, the Eurosystem has formally expressed its intention to join Project Nexus. This move is seen as a significant step toward enhancing the speed and efficiency of cross-border payments within Europe and beyond, potentially transforming the way European consumers and businesses engage in global transactions.
The Nexus model’s ability to connect multiple domestic instant payment systems will be a game-changer for the financial sector, promoting financial inclusion and making cross-border payments faster, more affordable, and accessible.
For more information on the Bank for International Settlements’ Nexus initiative, you can view their official announcement.