In recent years, instant payments have evolved from a mere ambition to an emerging backbone of global financial infrastructure, and this momentum now looks set to extend beyond the borders of any single country or jurisdiction.
This development is happening all around the world. Last week, building on its ongoing mBridge collaboration, the Central Bank of the UAE (CBUAE) announced expanded cross-border payment links with China, its largest trading partner.
And meanwhile, the European Central Bank also announced a new international agreement to connect the Eurosystem’s TARGET Instant Payment Settlement (TIPS) platform with major instant payment systems worldwide.
It is this bold move from the central bank that marks one of its most ambitious efforts yet to modernise cross-border payments and strengthen the global role of the euro.
TIPS connectivity goes global
The most significant development here is the ECB’s decision to progress work on linking TIPS with India’s hugely successful Unified Payments Interface (UPI).
This will mean that the ECB will now begin preparing the technical and legal foundations that are necessary to establish the connection.
India is one of the largest recipients of euro-area remittances, and the improved interoperability that will come from this linkage offers major benefits for both sides.
In parallel, the ECB is continuing its assessment of potential connectivity with Nexus Global Payments, a multilateral scheme designed to interlink instant payment systems across several Asia-Pacific markets.
This comes at the same time as work that is taking place within Europe, whereby the ECB has been expanding TIPS cross-currency capabilities to the Nordics. The Enhanced Linked Transaction (ELKT) settlement model, launching in October 2025, will enable cross-currency payments even if one or both currencies lack a dedicated scheme, so long as the currency is supported in TIPS.
Why now?
The push toward real-time cross-border payments is emblematic of a variety of global trends.
It is in parallel to the ongoing work being undertaken by the G20 to improve international payments by increasing speed, reducing costs and boosting transparency.
At the same time, cross-border retail volumes are expanding rapidly, with some estimates suggesting flows could rise from around $200 trillion last year to $320 trillion by 2032, making the market opportunity for financial institutions substantial.
This commercial activity is beginning to ramp up, with BNP Paribas and ANZ recently having completed the first near real-time AUD “Express Payment” using Australia’s New Payments Platform, demonstrating how domestic instant clearing rails can be leveraged to speed up international transactions.
There is also a financial inclusion angle to this change that instils further urgency, as migrant workers and other vulnerable groups are undoubtedly key beneficiaries from faster, more affordable remittance channels, while at the same time, competition from fintechs like Wise and Remitly is pushing banks to modernise or risk haemorrhaging customers to challengers.
The benefits and challenges
Cross-border instant payments offer wide-ranging benefits.
For customers, they unlock possibilities such as real-time settlement, clearer and more predictable execution timelines, and full traceability through enhanced data standards.
They integrate naturally with value-added services like Request to Pay, and they streamline exception handling and enquiry processes.
On the other hand, for the financial institutions that serve these customers, they enable more innovative product offers, help to move liquidity quicker for them, and open opportunities to develop premium services for correspondent banks.
Capabilities like this allow banks to close the competitive gap with fintechs and enhance their international payment propositions.
However, that doesn’t mean that there is not a smorgasbord of challenges that still need to be addressed.
Supporting instant payments around the clock creates a raft of new demands on back-office operational teams that are accustomed to batch processes and limited-service windows.
Banks are entering a world that includes stronger 24/7 liquidity management across multiple foreign-currency accounts, ensuring that settlement obligations can always be met.
At the same time, this means that sanction screening needs to become faster and more accurate if it is to avoid false positives or delays that undermine the instant experience.
Pricing structures also vary across schemes, creating commercial complexity for banks when designing customer propositions.
There is also technical divergence across regions, including differences in message formats, processing rules, data requirements, and settlement timelines. These sorts of variations require detailed operational planning and careful customer communication.
Global adoption will require support for new data fields, for example to report on all financial institutions involved in the payment chain, and character sets. Within the SEPA region, a lot of financial institutions for example have been supporting the latin character sets whilst converting UTF-8 characters.
Once they start participating in cross-border instant schemes, they will need to update their systems to support the CBPR+ character set end to end.
What this all means
The global shift toward instant cross-border payments is accelerating, and financial institutions need to now determine how and when they will engage.
Institutions need to evaluate the competitive advantages these initiatives can deliver, understand their operational and technical implications, and prepare to act quickly as new corridors open.
The ECB’s efforts to connect TIPS with UPI, and potentially Nexus, as well as the work undertaken in other jurisdictions, whether by public or private entities, represent a major step toward a more integrated global instant payments ecosystem, and as policy momentum, commercial innovation and customer expectations converge, the institutions that prepare now will be best placed to benefit from this faster, more transparent and more inclusive international payments landscape.
