Costs and Revenue for SAPs

Revenue earned by the SAP

In principle, the SAP acts as a service 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. For example, this could include a fixed periodic fee for the provisioning of the account, and/or a per-transaction fee for the transactions settled by the SAP on behalf of the FXP. These charges are agreed bilaterally between the SAP and FXP.

• The SAP may choose to supply the FXP with liquidity in the form of a line of credit, for a charge.

The SAP must not deduct fees from the value of the payment transferred:

• When acting as the Source SAP, the Source SAP must credit the FXP’s account with the exact amount that it received from the Source PSP

• When acting as the Destination SAP, it must debit the FXP’s account by the exact amount specified in the Interbank Settlement Amount in the payment instruction, and transfer that amount in full to the Destination PSP

• 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 the fees as levied by the domestic IPS for the processing. These fees are set by the IPS and are not defined or standardised in the Nexus Scheme Rulebook.

  • In most (but not all) IPSs, only the institution that initiates the payment pays a fee. This means that typically the Destination SAP will pay a fee to the Destination IPS, but the Source SAP will not pay a fee to the Source IPS.

• The SAP will need to apply sanction screening to payments it processes on behalf of the FXP (if required to do so by domestic regulations).

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 potentially be shared across other payment services, such as domestic payments).