It’s fair to say that the concept of FPS interlinking represents the cross-border payments equivalent of a video call. Just as digital connectivity has made it possible to talk and see each other halfway around the world, by just holding a mobile device, FPS interliking aims to make digital cross-border payments just as instantaneous.
FPS interlinking is emerging as a new way to move money across borders, connecting fast payment systems (FPS) across different countries. And as the G20 Cross-Border Payments Roadmap pushes forward with ambitious goals, FPS interlinking is gaining momentum as the ideal tool to accomplish them.
Near-instant speed, complete transparency, and minimum costs throughout the process—that’s the promise of FPS interlinking. In this article, we’ll explore what it entails, its full benefits and challenges, and where we can expect it to expand.
What Are Fast Payment Systems (FPS)?
Fast payment systems enable near-instantaneous fund transfers around the clock, typically with immediate confirmation and settlement.
These financial infrastructures have gained significant traction all over the world, marking a major departure from legacy payment systems that can take days to process and settle.
Key characteristics that distinguish FPS include:
- Speed: Transaction processing in near real-time, usually in seconds.
- Availability: 24/7/365, including weekends and holidays.
- Settlement: Funds are transferred and made available to the recipient almost immediately.
- Confirmation: Instant confirmation messages ensure that both the sender and receiver know the status of their transaction.
These systems have revamped domestic payments across many nations, leading to expectations of a similar experience in cross-border transactions.
FPS Interlinking: A Global Perspective
FPS interlinking connects domestic payment systems for seamless cross-border transfers. It creates technical bridges between different national systems, enabling transactions to flow across borders with the same efficiency as domestic payments.
As a result, users experience familiar interfaces while sending money internationally—and benefit from the speed.
FPS interlinking eliminates unnecessary intermediaries by linking payment infrastructures directly. Reduced costs and faster processing times are the initial gains with respect to traditional cross-border payments.
The G20 Cross-Border Payments Roadmap, launched in 2020, identified FPS interlinking as a priority. The plan is to create more efficient and inclusive global payments by 2027, addressing high fees, slow speeds, and limited access that have long frustrated users.
The Committee on Payments and Market Infrastructures (CPMI) is an essential partner in helping to realize this vision through the development of critical standards and guidelines. Their October 2024 reports highlight growing opportunities as more countries adopt fast payment systems and improve technical interoperability.
FPS Interlinking in Singapore and Thailand
Real-world FPS interlinking success stories are mounting rapidly.
Singapore and Thailand were the first to adopt this type of system in 2021. Their PayNow-PromptPay link allows transfers using only mobile numbers, shrinking transaction times from days to minutes and massively decreasing costs for users in both countries.
India and Singapore followed in 2023, connecting UPI with PayNow. This links two of Asia’s fastest-growing payment networks, creating new opportunities for businesses and consumers in both markets.
Project Nexus is the next step in FPS interlinking. Rather than building separate connections for each country pair, it generates a hub-and-spoke model, where payment system operators can reach out to all participating countries via a single connection.
The project includes the central banks of India, Malaysia, Singapore, Thailand, and the Philippines, with Indonesia participating as an observer. Together, their objective is to revolutionize digital cross-border payments by 2026, setting new standards for speed, cost, and accessibility.
Benefits of FPS Interlinking
The benefits of FPS interlinking are many and support the objectives of the G20 Roadmap’s enhancement of cross-border payments. These benefits ripple through consumers, businesses, financial institutions, and the broader economy, redefining how money moves across borders.
Speed and Efficiency
FPS interlinking significantly reduces transaction times for international money transfers, enabling near-instantaneous payments across borders.
The PayNow-PromptPay linkage between Singapore and Thailand demonstrates this transformation, as transfers that once took days are now completed in minutes.
Recipients gain immediate access to funds, which is particularly valuable for time-sensitive payments like emergency assistance or business transactions.
Reduced Costs
Conventional cross-border payments often include multiple intermediaries and charge fees that progress from one to another along the transaction path. FPS interlinking facilitates a more direct flow between payment systems, vastly lowering those costs.
With traditional cross-border payments, transactions cost around 7% of the total amount—or more. Before the PayNow-PromptPay linkage, senders had to pay up to 10% to move money between Singapore and Thailand. FPS interlinking aims to bring down those costs dramatically..
The cost advantages reach beyond single transactions. As payment providers compete with each other due to FPS interlinking, costs could continue to fall throughout the industry, making international transfers more affordable.
Improved Security
FPS interlinking incorporates robust security features to protect against fraud and cybercrime in cross-border transactions.
By implementing standardized protocols and data encryption throughout the interconnected systems, these arrangements often provide better security than traditional methods, which rely on outdated technologies or inconsistent standards across different countries.
Increased Transparency
One of the most frustrating aspects of traditional cross-border payments is the lack of visibility into transaction status and fees. FPS interlinking addresses this challenge by providing greater transparency throughout the payment journey.
Users can track their transactions in real time, understand exactly what fees they’re paying, and know precisely when money will arrive at its destination.
Expanded Market Reach
FPS interlinking is an opportunity for a business in the world market to promote itself by streamlining cross-border payments. Entering new markets is easier for businesses that can provide familiar payment experiences, no matter where they are located.
This benefit is particularly valuable for businesses targeting international customers or operating in regions with significant cross-border commerce, enabling growth opportunities that might otherwise be hindered by payment friction.
Challenges in FPS Interlinking
Despite its promising benefits, FPS interlinking faces several significant challenges that must be addressed to achieve its full potential in transforming digital cross-border payments. These hurdles span regulatory, technical, security, and operational domains, requiring coordinated efforts from multiple stakeholders.
Regulatory Harmonization
One of the fundamental challenges is navigating different regulatory frameworks, which govern payment systems across jurisdictions. The comprehensive blueprint for Project Nexus acknowledges this complexity, identifying the need for a governance framework that enables interoperability while respecting diverse regulatory environments.
In order to achieve regulatory harmonization, collaboration between financial authorities, central banks, and other stakeholders is necessary to align rules on key issues like data protection, consumer rights, and anti-money laundering requirements.
Without this alignment, FPS interlinking may face barriers that limit its effectiveness across different jurisdictions, creating an uneven global landscape.
Technical Standardization
Bridging disparate FPSs that use different technical frameworks requires extensive technological coordination. The domestic landscape of messaging formats, communication protocols, and data standards is diverse, making interoperability anything but seamless.
The increasing use of APIs and the ISO 20022 financial messaging standard has opened new possibilities for facilitating payment system interlinking.
However, further standardization efforts are needed to ensure consistent connectivity across diverse systems. As the network of interconnected systems expands, so do the technical challenges.
Security and Fraud Prevention
As payment systems become more interconnected, they face increased security risks and sophisticated fraud attempts. Robust security that is able to work across systems and borders—while keeping speed and convenience—is essential to protect against these threats, which can undermine the benefits of FPS.
Coordinated approaches to security standards are needed to implement strong authentication mechanisms, encryption standards, and fraud monitoring between interconnected systems. Security levels and capabilities might vary across countries, creating weaknesses throughout the interconnected network that must be addressed.
Operational Reliability
Another big challenge is ensuring operational reliability in a complex interlinked system. The more payment infrastructures that connect, the more opportunities for technical problems or outages that can impact users in multiple countries all at once.
Developing resilient systems with minimal downtime requires careful design, thorough testing, and ongoing maintenance. Contingency plans must address scenarios where one part of the interconnected system experiences problems, ensuring that disruptions don’t cascade throughout the network and erode confidence in the system.
The Future of FPS Interlinking and Digital Cross-Border Payments
The future of FPS interlinking is poised for significant growth and evolution, driven by several cross-border payments trends:
- Expanding global adoption: Project Nexus aims to launch in 2026, connecting multiple countries through a unified network rather than individual bilateral agreements. This scalable approach will dramatically expand global payment connectivity.
- Public-private collaboration: The Financial Stability Board notes that while progress has been made, “further efforts are needed” to meet cross-border payment targets, requiring continued commitment from all stakeholders.
- Central bank leadership: Financial authorities will balance innovation with risk management, providing crucial oversight and promoting standardization across borders.
- Technological advancement: Cross-border payment APIs will continue revolutionizing payments by acting as master keys that harmonize diverse systems and compliance requirements across different jurisdictions.
- Financial inclusion: Expanded FPS interlinking will reach developing economies, bringing more people into the formal financial system and supporting regions that rely heavily on remittances.
These developments collectively point toward a future where cross-border payments become as seamless, affordable, and accessible as domestic transfers, fundamentally transforming global financial connectivity.
The Path Forward With FPS Interlinking
FPS interlinking is revolutionizing cross-border payments with unprecedented speed, savings, and transparency. As the G20 Roadmap progresses toward its 2027 targets, this technology will continue dismantling barriers that have hindered international transfers.
Despite challenges in regulation, standardization, security, and operations, successful initiatives like PayNow-PromptPay and Project Nexus show that collaborative innovation can overcome these obstacles.
UniTeller leads this evolution with cross-border solutions in 120 countries, providing real-time payment capabilities to MTOs, corporations, banks, and retailers. Through a single API integration, businesses access their global network for P2P, B2C, C2B, and B2B payments with real-time transaction visibility.
Ready to transform your cross-border payment experience? Discover how UniTeller’s innovative solutions can help your business stay ahead in today’s interconnected financial world.
