PH, four Asian countries to link payments systems

FIVE central banks in Asia, including the Bangko Sentral ng Pilipinas (BSP), are preparing for the implementation of a cross-border retail payments platform under a Bank of International Settlement's (BIS) initiative.

The BIS, dubbed the central bankers' central bank, said its Project Nexus aimed to link the instant payment systems (IPS) of the Philippines, India, Malaysia, Singapore and Thailand.

The BSP, Reserve Bank of India (RBI), Monetary Authority of Singapore (MAS), Bank of Thailand (BOT) and Bank Negara Malaysia (BNM) will be the founding members while Bank Indonesia will remain a special observer.

"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," BIS General Manager Agustín Carstens said in a statement.

The BIS, BSP, RBI, MAS, BOT and BNM announced the completion of the detailed plan for phase three of Project Nexus, seen as enabling participants who are ready to work toward the next stage.

Phase four, which was launched on Sunday in Switzerland, will see the central banks of Singapore, Malaysia, the Philippines and Thailand — who worked together in phase three — joined by the Indian central bank, whose IPS is said to be the largest in the world.

The partner central banks and IPS operators have also agreed to work on the establishment of the Nexus Scheme Organization (NSO), which will be responsible for managing the overall scheme.

"The NSO will be wholly owned by the central banks and/or IPS in participating countries, depending on the specific domestic structures," the central banks said.

The BIS will not manage or operate the NSO. It helped develop the blueprint for phase three and will continue to provide technical advisory support as the participating countries prepare for the live launch of Nexus.

"I wish our partners in Nexus every success as they advance the project from concept to reality. This is the first BIS Innovation Hub project that central banks are moving toward a live phase together with instant payment providers," Carstens said.

"When implemented, it will greatly enhance cross-border payments in line with both the G20 cross-border payments programme and our mission to develop public goods in the technology space to support central banks and improve the functioning of the financial system," he added.

For his part, BSP Governor Eli Remolona Jr. said that the central bank would continue to work with the Philippine payments industry, the BIS and other interested countries toward the implementation of the cross-border payments system.

"We look forward to Nexus providing overseas Filipinos with a cheaper and faster means to send money to family back home, and facilitating the globalization of Filipino small- and medium-scale enterprises," he said.