IXB is believed to revolutionise cross-border payments, the first live transactions in the euro and US dollar currency being set to be processed in the following months. The IXB pilot will leverage existing real-time payment systems – RTP in the US, run by TCH, and RT1 in Europe, run by EBA clearing.
The IXB pilot has been progressing in the second half of 2022; developed with the support of 25 financial institutions, it resulted in the delivery of the IXB solution processing the technical messaging between the pilot institutions engaged in the testing and the respective payment systems. Currently, end-to-end testing between RTP, the IXB app and RT1 is being conducted, with user integration and testing set to follow shortly after.
Company representatives have stated in the press release that the insights and learnings to be gained from the pilot phase will be used to help prepare the service for commercial rollout in 2023. The connection between RTP and RT1 helps deliver a new way of moving money across borders in a safe, efficient, and less costly manner; the IXB model is also designed to allow the addition of further currency corridors in the future and is believed to revolutionise the way cross-border payments are made between the US and Europe.
EBA CLEARING, TCH, and SWIFT have been working to progress from the proof of concept to the design and development of a live IXB service. The three private-sector organisations, in cooperation with supporting financial institutions, designed a service that uses existing building blocks to ensure a shorter time to market and to leverage existing investments. IXB will allow synchronised settlement of RTP and RT1 payments, ensuring the certainty of execution of immediate cross-currency transactions, representing thus a core value of the future IXB service.
With a full service IXB offering planned to be launched after the IXB pilot service, the Committee on Payments and Market Infrastructures (CPMI) and Financial Stability Board (FSB) for enhancing cross-border payments has outlined that the service will be aligned with the focus areas related to speed, access, cost, and transparency. As it is based on a model that allows replication across other currency corridors and payment system, it is expected of the IXB initiative to add additional currencies from an early stage to meet customer expectations for global instant cross-border payments.
EBA CLEARING is a pan-European payment infrastructure solutions provider, processing over 17 billion transactions on a yearly basis. EBA CLEARING manages and operates the payment services EURO1, STEP2, and RT1. Both EURO1 and STEP2 have been classified as systemically important payment systems (SIPS) by the European Central Bank. RT1, the first pan-European real-time payment system, processes euro instant payments complying with the European Payments Council’s SEPA Instant Credit Transfer Scheme. R2P, the Company’s pan-European request to pay infrastructure messaging service, was developed and implemented with the support of 27 payment service providers from 11 European countries.
The Clearing House (TCH) operates US-based payments networks that clear and settle over USD 2 trillion daily through wire, ACH, check image, and real-time payments. TCH introduced to the US payments infrastructure the RTP network, which supports the immediate clearing and settlement of payments, along with the ability to exchange related payment information across the same secure channel.
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