PARTICIPANTS
User Experience
An End-To-End Payment Through Nexus
IPS & Bank Functionality
Sanctions Screening
FX PROVIDERS & LIQUDITY PROVIDERS
NEXUS GATEWAY & SCHEME
ANNEX: API & Message Definitions
ANNEX: Recalls & Unhappy Flows
Addressing Payments
Any payment instruction must specify an account belonging to the Recipient. Domestic payments are traditionally “addressed” using account numbers combined with a bank identifier.
Many IPSs now also enable one or more alias formats, allowing the Sender to address a payment to a mobile phone number, email address or other alias (see examples below). Note that aliases are proxies that are linked to existing accounts; they are not accounts in their own right. Before a payment can be credited to the ultimate recipient, the alias must be looked up and “mapped” to the corresponding account number.
An important design principle of Nexus is that any method of addressing a domestic payment within a Nexus-member country should also be a valid way to address a payment to that country via Nexus. Put differently, for any Destination Country, Nexus inherits the account and alias formats that are valid in that country. This means that the Recipient can provide the same details that they would use for a domestic payment to Senders outside the country.
When the Sender selects a specific country, they would be asked to select a way of addressing the payment, depending on the details they were given by the Recipient.
Nexus would not provide its own alias or proxy format; users could not register with Nexus to create a global “Nexus ID’.
We considered that a standardized alias format for addressing cross-border payments could be helpful if it avoided the need for Senders to have to deal with unfamiliar account formats for the destination country. However, requiring users to set up a new alias before being able to receive a payment adds friction to the payment process, potentially lowering adoption. It would also require Nexus Gateways to store sensitive personal data (ie the aliases and underlying account numbers).
Addressing payments via domestic account number
The Recipient can provide the Sender with the same account details that they would use to receive a domestic payment.
Account details vary in format from country to country, but typically include an account number and a series of numbers or letters that identifies the bank or branch which can update that account. Some examples of national account number formats are below.
Example Domestic Account Number Formats
Country
Account Number
Bank/Branch Identifier Format
Australia
Account number (9 digits)
BSB (Bank State Branch) code (6 letters)
India
Account number (9-18 digits)
IFSC code (11 letters and numbers)
Singapore
Account number (10 numbers)
Bank name
UK
Account number (8 digits)
Sort code (6 digits)
USA
Account number (10-12 digit)
Routing number (9 digits)
Addressing Payments via Aliases
Aliases provide an alternative method of addressing payments without using bank account numbers. Common aliases include:
- Mobile phone numbers
- Email addresses
- National ID numbers
- Registered company number
- A user-defined nickname
- Or other custom formats (such as the Indian UPI ID – see example below)
Aliases are easier for the Recipient to remember, while the Sender may already have the alias for a recipient (eg their phone number or email).
The alias is stored in a database by the IPS operator (or in some cases by the Recipient’s bank). When a payment is addressed to an alias, the IPS will look up the alias in the addressing service database and retrieve the relevant account numbers. It will then route the payment to that account as per normal.
Different countries have different formats of aliases as well as different levels of adoption. For example, in Sweden, most citizens use the Swish app which enables payments to a phone number (which is an alias for an underlying account number). However, the equivalent service in the UK, PayM, is not widely used and so mobile numbers cannot always be used to address a payment.
Note that in some countries, multiple aliases may be used (see examples below). This means the Sender must be asked which alias format they want to use when setting up a payment. This will be determined by the details they’ve been provided by the Recipient.
Example Alias Formats
Country
Aliases
Notes
Australia
“PayID” scheme: Phone number, email or registered business number
Addressing service provided by IPS operator (the New Payments Platform).
India
Mobile number, Virtual Payment Address (UPI ID), Aadhaar ID (non-mandatory national identity number)
UPI ID has the format [email protected] or [email protected] Only the bank is able to map the name to a specific account; the IPS operator does not have this information.
Singapore
PayNow: Mobile phone number, Unique Entity Number for corporations, National ID number
Significant adoption. Also used for payments from individuals to smaller businesses.
UK
PayM: Mobile phone number
Majority of account holders have not linked their phone number to an account via the PayM service
Sweden
Swish: Mobile phone number
The majority of Swedish adults are registered with Swish
How Nexus handles Aliases
Nexus includes a few design features that are intended to help users use aliases to address international payments:
- Since the Sender may be unfamiliar with the alias format, Nexus will provide some explanatory text that the Source Bank can display in the app to explain what the user should expect.
- The Source Bank’s app must validate that the alias entered by the Sender is in the correct format. These validation rules will also be defined in the Destination IPS’s SLD. For example, “[email protected]” is not a valid IPS format (because the user has assumed it should be an email address format and added “.com”). Likewise, mobile phone numbers are eight digits in Singapore, but 11 digits in the UK. It is simple to validate the correct format in the app, without communication with Nexus.
- Nexus will need to validate that the alias is valid and correctly maps to a real account in the destination country. This is done through the Account Validation process.
Unregistered Aliases
Users must register an alias to a specific bank account before payments can be sent to that alias. This creates a potential issue if the Sender routes the payment to an alias that is not registered. For example, in Sweden most citizens have registered their mobile number as an alias to their bank account via the Swish service. A Sender sending a payment to Sweden may use the recipient’s mobile number. However, when the Source Bank calls the Account API call, it will discover that the alias provided does not map to any account, and so the payment cannot proceed. In this case the Sender will be asked to provide alternative details.
Addressing payments via IBAN
The International Bank Account Number (IBAN) is often used for routing international payments. IBANs can be used in 78 countries (see SWIFT IBAN registry, available here). However, they are not used in some large or well-connected countries – for example, the USA, Canada, Singapore or Hong Kong. This means they cannot be imposed as the standard or required format for a payment through Nexus.
For countries that do accept IBAN, this will also be a valid way of routing a payment through Nexus, offered alongside the domestic account number format and any aliases.