What Is the BRICS Cross-Border Payment System? Features, Benefits and Impact on Global Trade

The BRICS Cross-border Payment System is an initiative launched by the BRICS nations to improve cross-border payments by making them cheaper, faster and more accessible through interoperability of domestic payment systems and use of national currencies. This particular initiative has become relevant in light of de-dollarization efforts, financial sanctions and reform of the international monetary system. Nevertheless, it should be noted that the BRICS Cross-Border Payments Initiative should not be confused with claims about the launch of an operational “BRICS Pay,” which has already substituted SWIFT. BRICS states the initiative as an ongoing initiative aimed at increasing interoperability of the domestic payment systems.

What Is the BRICS Cross-Border Payment System?

BRICS Cross-Border Payments Initiative refers to an initiative aimed at improving cross-border payment connectivity in BRICS nations. The goal of this initiative is to enable quick, affordable, and transparent payments, which will be efficient and safe.

As mentioned above, at the 2025 BRICS summit, it was suggested to continue discussing the BRICS Cross-Border Payments Initiative among the finance ministers and central banks’ governors. The BRICS Payments Task Force has been considering various ways to enhance interoperability in national payment systems.

This way, it is more appropriate to regard the BRICS Cross-Border Payments Initiative as an ongoing cooperation in payments than a centralized payment system functioning in BRICS countries.

Features of BRICS Payments Project

1. Interconnectivity of National Payment Systems

• One of the key goals is to establish greater connectivity between national payment networks. In such a way, each country will be able to utilize its national payment system to conduct cross-border payments instead of relying on traditional correspondent banking.
• Examples of such key systems include Indian UPI, China’s CIPS, and the financial messaging system in Russia.

2. Utilization of Local Currencies

• The project seeks to increase utilization of local currencies for payments during trade both bilaterally and multilaterally. In this case, rather than convert all payments into US dollars, they would be conducted in the local currency – Indian rupee, Chinese yuan, Russian ruble, or Brazilian real.

3. Faster and Cheaper Payments

• Cross-border payments may require many intermediaries, which can lead to higher fees and delays. According to the IMF, correspondent banking plays an important role in international payments and may entail large costs and significant delays, especially for countries that are not fully embedded in the global financial system.
• In this way, the improved interoperability and development of new payment technologies can make international transactions faster.

4. Digital Payment Technology

• The topic of innovative payment technologies and infrastructure has been discussed during BRICS talks. Nonetheless, statements about the creation of the BRICS blockchain-based system or common digital currency for BRICS need to be treated with caution.
• Official BRICS stance at this moment is related to interoperability, local currency payments and further technical talks rather than creation of a single BRICS currency or blockchain payment network.

Why Does BRICS Require An Alternative Payment System?

There are many reasons for which BRICS member nations are keen to look into alternatives to traditional cross-border payments systems.

Sanctions: Financial sanctions placed upon certain countries like Russia have made it clear that geopolitical significance plays a major role in international financial infrastructure.

Transaction costs: Cross-border payments could be routed through multiple correspondent banks and include currency exchange.

Diversification away from the dollar: Several developing nations would like to cut down their exposure to US dollar fluctuations.

Financial sovereignty: The more a country depends on its own currencies, the more choices it will have during times of geopolitical stress.

Comparison of BRICS Payment System with SWIFT

Feature	Existing System	BRICS Alternative
Main principle	Corresponding banking system and communication system	Interoperability of national systems
Currency	Dominance of USD and EUR	Domestic currencies
Goal	Connectivity in global financial system	Increased diversification of payment connectivity
Management	Systems of international financial infrastructure	Cooperation of BRICS
Status	Implemented	Pending development

Impact on International Business and Dedollarization

The establishment of a payment mechanism for BRICS can facilitate international settlements in local currency and decrease reliance on intermediary currencies, thus creating further ways for international payments.

The new mechanism might also help to build a more multipolar international monetary system. Nevertheless, a replacement of the dollar-based international financial system will not be easy. According to the studies conducted by the IMF, the US dollar is the major currency in cross-border settlements, while renminbi still occupies an insignificant part of the international market.

So, in the nearest future, diversification will prevail over dedollarization.