Options and Interoperability for South Pacific Payment Rails
The money is coming. Are the rails ready?
BSP Financial Group CEO Mark Robinson came back from the Institute of International Finance meeting in Bangkok with a clear message for the region. Supply-chain diversification and the search for energy and strategic resources are a fresh tailwind for the South Pacific. He expects a new super cycle over the next five to ten years, driven by around US$25 billion of investment in large LNG, copper and gold projects, drawing investors from East Asia, India and beyond.
I agree. But when that money arrives, what will it move on?
Coverage out of Sibos in Miami summed up the global agenda as real time, rails and resilience. From the Pacific, real time looks partial; some markets now run 24/7 instant transfers, while others settle interbank payments only within business hours. Rails are multiplying faster than small markets can connect. And resilience, for some Pacific banks, means holding on to a last correspondent relationship in a key currency.
Which rail, for which payment
In July I wrote about why fewer banks are willing to move Pacific money. This piece picks up the next question. The region will not solve its payments challenge by choosing one winning rail. It needs a small number of rails, each matched to the payments it suits, built to connect once to each other and to the world. Interoperability is the strategy; infrastructure is only the means. And the hardest part is not the technology. It is getting six South Pacific central banks, the smaller dollarised states, and the governments, banks and telcos behind them to deliver something together.
Five payment types, five different needs
At least five flows ask different things of the rails.
Personal remittances. High frequency, low value and highly cost-sensitive; remittances are more than 40 per cent of Tonga's GDP, and the average cost of sending money into the region has been around 9 per cent, three times the UN target of 3. In Fiji, mobile networks now carry almost half of the FJ$1.3 billion in annual inward remittances.
SME payments. Domestic and regional trade, supplier payments and the cash crop chain. They need low cost, same-day certainty and simple onboarding.
Wholesale and project payments. The LNG, mining and infrastructure investment behind the super cycle brings multi-currency treasury and high-value payments clearing through USD and AUD.
Aid and development funding. Donors need traceability; recipients need funds to reach remote communities.
Government payments. Salaries, social transfers, tax collection and procurement. Fiji paying welfare through mobile wallets during COVID-19 showed how quickly government flows drive adoption.
No single rail serves all five well. The design question is how the rails hand off to each other.
The options on the table
The menu is well understood; what varies is maturity.
Correspondent banking and Swift remain the backbone for USD, AUD and NZD; the constraint is the thinning number of relationships, not the messaging.
Domestic instant account-to-account rails are where the region diverges most. Fiji now offers round-the-clock instant transfers for everyday amounts, with interoperability between bank accounts and mobile wallets. In PNG, interbank direct credits still clear in four sessions a day, Monday to Friday; instant payments are limited to non-bank members of the national switch, with a wider rollout planned.
Cards and QR carry tourism, e-commerce and business spending through international schemes and national switches, and Fiji and Solomon Islands are both working towards unified QR standards. Visa Direct and Mastercard Move now also push cross-border payments to bank accounts and wallets, not only cards.
Mobile money and wallets are the reach layer for remittances and rural households.
Bilateral instant links and multilateral networks such as Nexus form the cross-border layer.
Tokenised deposits, stablecoins and CBDC are being tested across the region, from Vanuatu's licensing regime to central bank pilots in PNG and Solomon Islands. The sensible posture is to be ready to connect, not to build first.
The card schemes bring global acceptance, fraud tools and reach that no Pacific market could build alone. But a card or wallet is a front end. Value still settles between banks and must reach an account, or an agent, before the recipient can use it. Cards and wallets extend the account rails; they cannot replace them.
The honest counterpoint: some Pacific markets may never generate the volume to justify a standalone domestic instant system, and cash still matters: 62 per cent of Fijians prefer it for everyday spending. A shared regional platform may be more realistic, which makes interoperability between rails matter more than how modern any one rail is.
Four pillars of feasibility
Any option has to clear four tests.
Infrastructure. Resilient connectivity, from undersea cables to satellite, payments data management and ISO 20022 used end to end rather than filed as a compliance project. Build for 24/7, even where volumes are small.
Economics. Payment fee revenue in small markets rarely funds a national switch. Fiji's reforms were backed by the World Bank and IFC. The question is who funds the build and, harder, the run: central banks, banks, telcos, vendors or development partners. The super cycle is a window; flows that depend on reliable rails can help pay for them.
Compliance. Fixed compliance costs make small banks uneconomic for correspondents, and grey-listing, cash economies and corruption concerns raise them further. Digital identity is the hinge. PNG launched SevisPass in November 2025 and is piloting bank account opening inside its digital wallet; Fiji's national digital ID project involves 19 ministries. Trusted identity for people and businesses, with tiered KYC, lets banks onboard the unbanked confidently; a shared eKYC utility spreads the cost.
Governance. This is the binding constraint. Six central banks with different mandates and capacity, dollarised smaller states, foreign-owned and domestic banks, telcos and donors all have a stake. Four questions decide whether anything is delivered: structure (who owns and operates a shared scheme), policy (a common rulebook, AML standards and data rules), resources (who staffs it) and budget (funding over ten years, not three).
The region is good at convening; last December the World Bank and Pacific Islands Forum held the first Pacific fast payments workshop in Nadi, and Japan has since proposed a shared settlement mechanism for Pacific remittances. Convening is not delivering. Australia's own move to real-time payments, which I was part of, was ultimately a governance achievement: a shared industry company, agreed funding and a common rulebook, with the technology procured underneath.
What Nexus teaches about delivery
Project Nexus is the most useful reference point, less for its technology than for how it is being governed. It links domestic instant payment systems so each country connects once and reaches every other member; for the six South Pacific currencies, that is six connections instead of 15 bilateral links, each with its own legal, FX and compliance arrangements.
The BIS Innovation Hub proved the concept, then handed it to the central banks of India, Malaysia, the Philippines, Singapore and Thailand. They formed Nexus Global Payments as a not-for-profit scheme manager in March 2025; Indonesia joined in February 2026. The same month, a PayNet and NETS joint venture was appointed technical operator after a competitive procurement, with go-live targeted for 2027. Ownership, rulebook and operation are kept separate.
For the Pacific, Nexus is a destination rather than a starting point. It presumes a working domestic instant system in each member, which most of the region does not yet have. The practical path is to build domestic rails to Nexus-compatible standards now, and to consider whether the Pacific connects as a bloc through a shared hub rather than as six small members.
Australia is weighing the same choice, which matters because the region's largest remittance corridors start there. Reserve Bank of Australia work with industry found a preference for multilateral links, with governance and scheme rules the main hurdles. The RBA will engage industry through 2027 on the case for linking the NPP to other fast payment systems. At Sibos, AP+ chief executive Lynn Kraus spoke of extending PayID's simplicity across borders through Swift's pay-by-alias initiative.
From options to a delivery plan
Central banks: agree common standards and a regional vehicle with a real mandate and budget.
Commercial banks: modernise for 24/7, consolidate correspondent volume and join shared identity and compliance utilities.
PSPs and remitters: connect to domestic instant rails and wallets, and help bring informal flows inside the perimeter.
Development partners: fund the shared layers and their running costs, not only the builds.
The options analysis is the easy part. Turning it into something six central banks, their governments and dozens of institutions can own, fund and run is where most initiatives stall, and it is the work I find most rewarding.
I will be at the Island Nations Currency & Payments Summit in Denarau on 26 to 28 October, speaking on cross-border payments. I would welcome the conversation. Which of the four pillars do you see as the hardest to resolve?
Sources: Institute of International Finance Annual Membership Meeting commentary (Mark Robinson, BSP Financial Group); Reserve Bank of Fiji; Bank of Papua New Guinea; PNG Department of ICT; Nexus Global Payments; Monetary Authority of Singapore; World Bank; Pacific Islands Forum Secretariat; Artipi.
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