Flow of funds through Nexus
This section shows how funds flow through Nexus. This is a simplified example that excludes many details and IPS-specific variations. The detailed messaging and processing steps are covered in much more detail in the next section.
For this example, let’s assume Maria Rossi, in Italy, wants to send SGD150 to Wei Long in Singapore. The exchange rate from the FXP is exactly 1.500 so Maria will pay EUR100.
First, the Source PSP debits Maria’s account by EUR 100
The Source PSP sends the payment instruction to the IPS
The IPS processes this payment by:
Debiting the Source PSP by EUR 100, and
Crediting the Source SAP by EUR 100
(The Source SAP will now credit the account it holds for the FX Provider with EUR 100)
The Source IPS sends the payment instruction to the Source Nexus Gateway.
The Source Nexus Gateway looks up the original FX quote, applies the exchange rate, and forwards the instruction (now denominated in SGD) to the Destination Nexus Gateway
The Destination Nexus Gateway now forwards the instruction to the Destination IPS
The Destination IPS sends the instruction to the Destination SAP, who:
Checks the FX Provider’s account with the SAP holds sufficient funds
Debits the FX Provider’s account by SGD 150
The Destination SAP sends the instruction back to the Destination IPS
The Destination IPS sends the instruction to the Destination PSP, for review
If the Destination PSP is happy to accept the payment, they will send an acceptance message to the Destination IPS
The Destination IPS now processes the payment by:
Debiting the Destination SAP by SGD 150, and
Crediting the Destination PSP by SGD 150
The Destination PSP can now:
Credit the Recipient’s account with SGD 150, and
Notify the Recipient that they have received a payment
The end result of this transaction is:
The Sender has paid out EUR 100
The Source PSP has paid EUR 100 to the Source SAP
The Destination SAP has paid SGD 150 to the Destination PSP
The Recipient has received SGD 150
The FXP has received EUR 100 in their account at the Source SAP, and paid out SGD 150 from their account at the Destination SAP. (So the FXP has exchanged EUR 100 for SGD 150.)
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