This section describes how a payment is processed through Nexus, at a detailed functional level, following a successful Payment Setup process.
For a high-level overview of this process, please refer to pages 31-32 of the Nexus report.
The detailed flows below are split into the two separate stages in the Source Country and then in the Destination Country. They also show both the 4-step and 5-step processes that apply to domestic payments.
When Nexus successfully processes a payment which references an FXP’s quote, Nexus will send a notification to an API endpoint provided by the FX Provider.
The notification will give the following details:
Date and time of payment
Unique End-to-End Transaction Reference (UETR) of the underlying payment
Currency & amounts:
Source Currency
Amount in Source Currency
Destination Currency
Amount in Destination Currency
Exchange Rate
Parties:
Source PSP (Debtor Agent)
Destination PSP (Creditor Agent)
(No Personally Identifiable Information on the Debtor and Creditor)
Audit trail:
ID of the FXP’s rate on which this quote was based
ID of the tier (if applicable) that applied to the quote
ID of the relationship record which links the PSP and FXP (which includes the PSP improvement, if any)
These notifications allow the FXP to update their internal records and monitor the balance of each of their accounts.
The FXP is responsible for processing these notifications in order to update their internal systems to keep track of their liquidity.
Nexus assumes that the Source SAP and Destination SAP do not provide real-time notification of transactions to the FXP. In case they do, the FXP should be careful not to double-count the transaction. Notifications from Nexus will be sent immediately so that the FXP can keep track of their liquidity.
The Destination Country processing flow is shown below:
The Destination Country payment process follows the following steps:
The sending payment process follows the following steps:
1
The Destination Nexus Gateway sends the Nexus pacs.008 to the Destination IPS.
The Destination IPS may need to convert this message into its local format before forwarding this to the Destination SAP.
No reservations need to be made at this stage.
2
The Destination IPS sends the payment instruction to the Destination SAP
The IPS is free to decide on the format of the payment message for the interaction towards the D-SAP and the D-PSP.
If ISO 20022 is not used domestically, the IPS will need to translate from the Nexus pacs.008 to the domestic payment instruction format.
3
The Destination SAP confirms that the FX Provider has sufficient funds with them, and applies sanctions screening and compliance checks if required.
If the Destination SAP is happy to proceed with the payment, it will debit the FXP’s account with them by the amount of the payment. If the Destination SAP is not able to validate the payment, the Destination SAP can reject the transaction.
The D-SAP either submits the payment instruction message to the Destination IPS, effectively giving the IPS the instruction to make payment to the Destination PSP or rejects the transaction.
4
The Destination IPS, upon receiving the validated instruction from the Destination SAP, either settles the transaction (4-step settlement process) or ensures settlement (by reserving the pre-funded balance of the Destination PSP or otherwise in a 5-step settlement process).
5
The Destination IPS forwards the payment message to the Destination PSP for validation.
6
The Destination PSP will apply sanctions screening and compliance checks before deciding whether to accept the payment.
If the Destination PSP is happy to accept the payment they will then return a payment status message accepting the payment instruction.
7
5-step settlement only Upon confirmation of the Destination PSP, the D-IPS will settle the transaction.
8
5-step settlement only In case of a confirmation and successful settlement, the D-IPS will confirm settlement to the Destination PSP.
9
In case of a confirmation and successful settlement, the D-IPS will confirm settlement to the Destination SAP.
10
The Destination PSP credits the Creditor Account. The D-PSP should inform the Creditor of the arrival of funds, according to the local scheme requirements.
11
In case of a confirmation and successful settlement, the D-IPS will confirm settlement to the Destination Nexus Gateway.
The Destination IPS must use the Nexus pacs.002 payment status report format to confirm the transaction to the Nexus Gateway. See Messaging & Translationfor details on the format.
Nexus does not prescribe the internal booking flow for PSPs (ie how and when they should debit the Sender/Debtor Account). However, payments submitted to Nexus cannot be stopped or recalled, meaning that payments in error can only be recovered by manual communication between the Source PSP and Destination PSP. Therefore the Source PSP should always ensure the payment can be processed on the account before sending the transaction.
This results in the following options for the Source PSP:
Option 1: Reservation followed by Booking
The Source PSP validates the payment and make a funds reservation on the Sender’s account.
The funds reservation must be upheld until the final response is received from the Source IPS.
When the response indicates successful processing of the payment (either an ACCC or an ACWP response), the funds reservation results in a debit booking on the Sender’s account.
Option 2: Booking with optional reversal
The Source PSP can also opt for the option of debiting the Sender’s account before sending the instruction to the Source IPS for further processing.
If the response is received with an ACCC or ACWP code, no further action is required.
In case the response indicates a RJCT code, the original debit on the Senders account must be reversed, resulting in a debit and credit booking.
# | Process Step | Specific Requirements |
1 | The Sender initiates and authorizes a Nexus cross-border payment. | The Sender has full transparency on the amount to be credited to the Recipient. |
2 | The Source PSP debits the Sender’s account or reserves the funds against the Sender's account balance. | The Source PSP must ensure the Sender has sufficient funds and must ensure the payment will be honoured, either by debiting the Sender’s account or by making a reservation of the funds on the account. |
3 | The Source PSP sends the payment instruction to the Source IPS. |
4 |
5 | The Source IPS sends the payment instruction to the Source SAP for validation. |
6 | The Source SAP reviews the payment instruction. As this is a cross-border payment, it may need to also apply sanctions screening, if required by local legislation. If the Source SAP is happy to accept the payment on behalf of the FXP (its customer), the Source SAP will respond with a payment status message to confirming that it will accept the payment. | Nexus does not prescribe the format of the domestic payment status confirmation message. The IPS will monitor the response times of the Source SAP to ensure the response falls within the SLA. In case of a reject, the IPS will reverse the settlement and/or undo the reservation and confirm the reject to the Source PSP. |
7 | The Source IPS sends a Nexus | Unlike a domestic payment, the Source IPS would not send a confirmation to the Source PSP or Source SAP yet. Instead, it waits to receive the response from Nexus. Some IPSs may still choose to send a |
8 | The Nexus validates and transforms the payment instruction to prepare it for the second leg by:
Nexus then forwards the payment instruction to the Destination IPS. |
9 | The Nexus |
10 | The Destination Nexus Gateway sends the result from the Destination IPS processing in a Nexus |
11 | The Source Nexus Gateway forwards the | If the Source IPS does not use ISO 20022 to communicate with its participants, it may translate the |
12 | In case of a reject, the Source IPS will undo the reservation, or, in the case of a 4-step settlement model, return the transaction by reversing the settlement obligations. |
13 | 5-step settlement only The Source IPS will send the Source SAP a confirmation that the payment has been successful or rejected. |
14 | The Source IPS will send the Source PSP a confirmation that the payment has been successful or rejected. |
16 | The Source PSP can now inform their Sender that the payment is complete (either confirmed or rejected). |
17 | Finally, the Source Gateway informs the FXP that a payment has been processed using their quote; this is important to enable the FXP to keep track of their liquidity. The FXP may also be separately updated of their account balances by the Source SAP and Destination SAP. |
There are no Nexus requirements on the format of the domestic payment message. The IPS must ensure the used payment message format contains sufficient data to cater for a Nexus payment message to be sent to the Nexus gateway. This includes elements such as the Source and Destination SAP (Intermediary Agents), the accounts of the FXP and the exchange rate. For full details of the Nexus requirements, see
The Source IPS either updates the settlement obligations () or ensures settlement (by reserving the pre-funded balance of the Source PSP or otherwise) in a .
The Source IPS must ensure settlement certainty. There is no requirement for Nexus how to do this (either by settling the transaction, making a reservation against a prefund or otherwise). (See .)
The Source IPS will also need to ensure a potential reject can be processed, even in the case of a settled transaction () in case of issues with other participants (eg lack of funds at the Source SAP, default of one of the participants, etc).
(See below for more details.)
only The Source IPS will finalise the payment between the Source PSP and Source SAP by updating the settlement obligations.
