The 16th BRICS Summit, held in Kazan, Russia, from October 22 to 24, 2024, placed Brics Pay at the forefront of discussions. While the initiative has sparked significant debate across Western nations, Russia, and India, it has received relatively limited attention in China. This article explores the background, operational framework, and strategic opportunities—particularly for Chinese telecom operators—presented by Brics Pay, offering insights into its potential impact on global finance and digital infrastructure.
The Strategic Background of Brics Pay
Brics Pay is not merely a technical upgrade—it's a geopolitical and economic response to systemic challenges in global finance. Three key drivers underpin its development:
1. Pursuit of Financial Sovereignty
Following geopolitical tensions such as the Russia-Ukraine conflict and Middle East instability, several BRICS nations are actively seeking alternatives to Western-dominated financial systems. Russia and Iran aim to bypass SWIFT restrictions and reduce reliance on the U.S. dollar. Meanwhile, China is advancing RMB internationalization through mechanisms like CIPS (Cross-border Interbank Payment System). South Africa and Brazil seek to mitigate exchange rate volatility by promoting local currency trade, while India pushes for greater global recognition of the rupee.
Despite differing national priorities, the collective goal is clear: increase usage of domestic currencies in bilateral trade and reduce dependence on Western financial intermediaries. Brics Pay enables direct cross-border transactions in national currencies—bypassing both the dollar and SWIFT—making financial sovereignty a tangible reality.
2. Strengthening Intra-BRICS Economic Ties
BRICS countries represent approximately 42% of the global population, 26% of global GDP, and 20% of international trade. They form a powerful economic bloc outside traditional Western-led institutions. Recent trends underscore deepening economic integration:
- Sino-Russian trade grew by over 26% in two years, far outpacing Sino-EU growth at 2.4%.
- China’s imports from Brazil rose 16.5% in 2023.
- Indian-Russia oil trade surged significantly.
- South African wine exports to other BRICS nations are on the rise.
These dynamics highlight growing intra-BRICS commerce—but existing Western-centric payment systems pose risks due to rising protectionism and fragmented regulatory environments. First proposed by the BRICS Business Council in 2019, Brics Pay gained momentum during the 2023 Johannesburg Summit and was publicly demonstrated in Moscow that same year. By 2024, it had become a focal point among central banks, financial institutions, and media outlets across member states.
3. Overcoming High Costs and Inefficiencies in Cross-Border Payments
Traditional cross-border payments suffer from high fees and slow processing times. For example:
- Platforms like Alipay charge 2–3% per transaction (e.g., $20–30 on a $1,000 transfer).
- Visa collected over 228 billion RMB in fees in fiscal 2023 alone, reflecting widespread cost burdens.
These costs stem from multiple intermediaries—including correspondent banks and clearinghouses—each adding fees and delays. A typical international transfer may take 1–3 business days, hindering e-commerce efficiency and customer satisfaction.
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Brics Pay aims to leverage digital innovation, including blockchain and decentralized networks, to deliver faster, cheaper, and more resilient alternatives—opening new pathways for businesses and individuals alike.
How Brics Pay Works: A Decentralized Alternative
Western analysts view Brics Pay as a potential disruptor capable of reshaping global finance by reducing reliance on institutions like SWIFT. To understand its potential, we must examine both current systems and Brics Pay’s proposed architecture.
Current Cross-Border Payment Infrastructure
Global settlements rely on two core components:
- National payment systems like CHIPS (U.S.), CIPS (China), or SPFS (Russia), which handle domestic clearing.
- SWIFT, which transmits standardized financial messages between institutions internationally.
For instance, when a Russian bank sends RMB to a Chinese recipient:
- The sender uses SPFS or SWIFT to notify ICBC Moscow.
- ICBC Moscow relays instructions via SWIFT to its head office.
- Funds are cleared through CIPS and settled via China’s HVPS (High-Value Payment System).
While efficient under normal conditions, this process remains vulnerable—especially if SWIFT access is revoked due to sanctions. With 70% of global trade settled in USD or EUR, BRICS nations remain exposed to external control.
Brics Pay Architecture: Key Innovations
Brics Pay proposes a decentralized, blockchain-based system designed for resilience and autonomy. Its core features include:
- Decentralized Network: Utilizes a "Router Cloud" based on blockchain technology to distribute transaction data across nodes, eliminating single points of failure.
- Smart Contracts: Automate payment execution upon fulfillment of predefined conditions, reducing fraud and manual intervention.
- Real-Time Settlement: Enables instant fund transfers across borders with 24/7 availability.
- Low Transaction Fees: Significantly reduces costs compared to legacy systems.
This architecture grants BRICS members greater control, transparency, and security—offering an attractive alternative for emerging economies seeking financial independence.
Ecosystem Participants and Interoperability
Brics Pay involves multiple stakeholders working in concert:
- Central Banks: Set policy, regulate operations, and promote local currency adoption—including central bank digital currencies (CBDCs).
- Clearing Institutions: Such as UnionPay (China), Mir (Russia), and RuPay (India), responsible for transaction settlement.
- Commercial Banks: Provide account services, FX conversion, and fund transfers.
- Payment Providers: Offer user-friendly interfaces for mobile and online payments.
- End Users: Businesses and individuals conducting cross-border trade, investment, or remittances.
Importantly, Brics Pay is designed for interoperability with existing systems. For example:
- It can integrate with CIPS for RMB-denominated transactions, enhancing efficiency.
- It supports dedicated international Ethernet private lines (IEPL) to transmit payment data without relying on SWIFT—boosting both speed and security.
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Strategic Opportunities for Chinese Telecom Operators
Building a robust cross-border payment system is a long-term endeavor—CHIPS took decades to mature; CIPS has evolved over 12 years. Yet amidst rising multipolarity, Brics Pay represents a transformative opportunity. For Chinese telecom operators, three strategic entry points emerge:
1. Digital Infrastructure Enablement
Brics Pay relies on advanced technologies like blockchain, cloud routing, and IEPL networks. Telecom operators possess unique strengths:
- China Telecom’s “National Cloud” offers proprietary solutions for financial digital transformation.
- Wing Payment has won national awards for blockchain innovation.
- China Unicom International provides IEPL connectivity across 200+ countries.
Operators can contribute technical expertise to BRICS councils, helping shape infrastructure standards and improve global interoperability—positioning Chinese solutions at the heart of future finance.
2. Cybersecurity and Fraud Prevention
Security is non-negotiable in financial systems. As state-backed leaders in cybersecurity, Chinese telecoms can provide:
- Quantum-safe encryption
- Identity authentication frameworks
- Real-time fraud monitoring systems
By setting security benchmarks—especially for IEPL data transmission—telecoms can influence international standards and gain strategic influence in cross-border financial operations.
3. Enhancing User Experience
For Brics Pay to achieve mass adoption, user experience must rival leading platforms. With Wing Payment boasting over 500 million registered users and 40 million monthly active users, China Telecom has deep expertise in mobile payments.
Operators can guide product design—streamlining workflows, developing intuitive apps, and integrating diverse payment methods—to make Brics Pay more competitive globally. This also paves the way for expanding their own payment services overseas.
👉 See how user-centric design drives adoption in global fintech ecosystems.
Frequently Asked Questions (FAQ)
Q: What is Brics Pay?
A: Brics Pay is a proposed decentralized cross-border payment system among BRICS nations (Brazil, Russia, India, China, South Africa) designed to facilitate trade using local currencies while reducing reliance on SWIFT and the U.S. dollar.
Q: Does Brics Pay use cryptocurrency?
A: No—it does not rely on public cryptocurrencies but may incorporate central bank digital currencies (CBDCs) issued by member states.
Q: Can Brics Pay replace SWIFT entirely?
A: Not immediately. While it aims to reduce dependence on SWIFT through alternative messaging channels (e.g., IEPL), full independence will require time, technical integration, and widespread adoption.
Q: How does Brics Pay benefit ordinary users?
A: Users can expect faster international transfers, lower fees, increased privacy, and greater access to regional markets without currency conversion bottlenecks.
Q: Is Brics Pay already operational?
A: As of 2024, it remains in development with pilot demonstrations completed. Full rollout depends on intergovernmental coordination and technical readiness.
Q: Will non-BRICS countries be able to join Brics Pay?
A: Expansion is possible as BRICS continues to grow—new members admitted in 2024 may accelerate integration into the system.
Core Keywords: Brics Pay, cross-border payments, financial sovereignty, blockchain payment system, decentralized finance, SWIFT alternative, CIPS integration, digital currency infrastructure