BRICS Pushes Faster and Cheaper Cross-Border Payments

BRICS Advances Cross-Border Payment Cooperation

BRICS Pushes Faster and Cheaper Cross-Border Payments: Ahead of the 18th BRICS Summit in New Delhi in September 2026, member countries are exploring mechanisms to make international payments faster, cheaper and more efficient. Finance ministries and central bank representatives recently met in Jaipur to discuss financial cooperation, including the linking of national payment systems and Central Bank Digital Currencies (CBDCs).

India, as the 2026 BRICS Chair, is promoting a practical approach focused primarily on reducing transaction costs and improving settlement efficiency.

Static GK fact: BRICS originally comprised Brazil, Russia, India, China and South Africa. The grouping has expanded its membership in recent years.

Why International Payments Remain Expensive

Cross-border payments generally pass through correspondent banks rather than moving directly between the banks of two trading countries. For example, a payment between South Africa and India may be routed through an international bank, with currencies potentially converted through the US dollar as a vehicle currency.

Each intermediary can add fees, while multiple currency conversions create additional foreign-exchange margins. A 2019 BRICS survey found forex margins of about 2.5% for Brazilian respondents, rising to 8.5% for Africa-related payments and reaching as high as 20% in some cases.

SWIFT’s Role in Global Payments

SWIFT (Society for Worldwide Interbank Financial Telecommunication) provides the secure messaging infrastructure through which financial institutions exchange payment instructions. It is based in Belgium and operates as a cooperative overseen by the National Bank of Belgium and G-10 central banks.

SWIFT is used directly by more than 11,000 institutions across over 200 countries and territories, making it deeply integrated into international financial infrastructure.

Static GK Tip: SWIFT primarily facilitates the exchange of payment messages; it is not itself a bank or a system that directly transfers money between customers.

Why BRICS Seeks Alternatives

Developing economies face exposure to dominant international currencies such as the US dollar, euro and yen, including the monetary policies of their issuing economies. BRICS discussions therefore examine ways to reduce transaction costs and improve financial autonomy.

However, creating an alternative network requires widespread participation from banks, regulators and financial institutions. The exclusion of several Russian banks from SWIFT in 2022 also highlighted the geopolitical and sanctions-related risks associated with international payment infrastructure.

Payment Links and Project Nexus

One option is to establish direct links between national payment systems. India has already demonstrated this approach through the connection between UPI and Singapore’s PayNow, enabling faster cross-border remittances.

A broader model is Project Nexus, developed by the Bank for International Settlements (BIS) to connect multiple domestic instant-payment systems through a common hub. It is expected to become operational in 2027 and is not a BRICS initiative.

CBDCs and mBridge

BRICS is also examining CBDC-based cross-border settlements. Under this approach, digital versions of national currencies could be exchanged through a common platform, allowing both sides of a transaction to settle simultaneously.

The operational mBridge platform was developed by the BIS Innovation Hub with the central banks of China, Thailand, Hong Kong and the UAE. BIS handed the platform over to participating central banks in October 2024. More than 95% of mBridge settlement volume has reportedly been conducted in China’s digital yuan.

The 2024 Kazan Declaration agreed to study the feasibility of BRICS Clear, a possible independent settlement mechanism. However, the proposal was absent from the subsequent Rio Declaration.

India’s Cautious Approach

India has proposed linking CBDCs for trade and tourism payments, with officials emphasising lower costs and faster settlements rather than presenting the initiative as a direct challenge to the US dollar.

This differs from stronger proposals advocating reduced dollar dependence. India’s approach reflects a more pragmatic focus on payment efficiency while avoiding an explicitly geopolitical framing.

As India hosts the 2026 BRICS Summit, its cost-focused approach could influence the future direction of the grouping’s cross-border payment agenda.

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BRICS Pushes Faster and Cheaper Cross-Border Payments: