Revenue model

In principle, the SAP acts as a provider to the FXP, by facilitating access to the IPS for that FXP. The commercial relationship between the SAP and the FXP sits outside of the scope of the Nexus Scheme and the specific pricing arrangements are to be arranged bilaterally between the FXP and SAP. However, note that the Nexus Scheme does set the following requirements:
  • The SAP is permitted to charge the FXP for the service it provides. This could include a fixed periodic fee for the provisioning of the account, as well as a per-transaction fee for the transactions settled by the SAP on behalf of the FXP. (As these transactions are settled in the domestic IPS, it would be in line with convention for the SAP to charge a flat transaction fee, not a percentage of the amount.)
  • The SAP could also supply the FXP with liquidity in the form of credit, for a charge.
  • The SAP is not allowed to deduct fees from the value of the payment transferred; it must pass on the funds in full. Any fees charged by the SAP to the FXP must therefore be charged separately and paid by the FXP to the SAP outside of the Nexus scheme.

Costs incurred by the SAP

  • The SAP will have to pay membership fees and likely per-transaction fees to the domestic IPS. These fees are set by the IPS and are not defined or standardised in the Nexus Scheme Rulebook.
  • The SAP will need to become a Participant in the Nexus Scheme and as such, is liable for a SAP-specific Nexus Scheme membership fee (if one exists). Any Scheme fees charged to SAPs will be set by the Nexus Scheme Organisation such as to cover the costs of the Nexus Scheme on a non-profit basis.
  • The SAP will need to apply sanction screening to payments it processes on behalf of the FXP.
The SAP will need to include these costs in its fees towards the FXP (although some of these costs, such as IPS membership fees, can be shared across other payment services, such as domestic payments).