BRICS Pay: A Bid to Reduce SWIFT Dependence | 06 Nov 2025

Source:TH 

Why in News? 

BRICS is seeking to reduce Western dominance in global financial architecture by developing BRICS Pay, a cross-border payments framework intended to reduce reliance on the US–led Society for Worldwide Interbank Financial Telecommunication (SWIFT) system. 

What is BRICS Pay?

• Background for BRICS led Financial System: BRICS began pursuing financial autonomy at the 2014 Fortaleza Summit by creating the New Development Bank and the Contingent Reserve Arrangement.  
  • US and EU sanctions on Russia in 2015 pushed members to explore greater use of local currencies, leading to currency-swap and settlement cooperation by 2017.  
  • This effort culminated at the 2024 Kazan Summit with the launch of BRICS Pay to boost local-currency cross-border settlements and strengthen intra-BRICS banking networks. 
• BRICS Pay: It is a proposed cross-border payment system to facilitate trade and financial transactions among BRICS member nations using local currencies, thereby reducing dependence on systems like SWIFT and the USD. 
  • It is part of the BRICS Cross-Border Payments Initiative, aimed at increasing financial sovereignty, economic cooperation, and resilience against sanctions. 
• Interoperability: BRICS Pay envisions interoperability between national payment platforms, including: 
  • Russia’s System for Transfer of Financial Messages (SPFS) alternative to SWIFT. 
  • China’s Cross-Border Interbank Payment System (CIPS), which has participants in 120+ countries. 
  • India’s Unified Payments Interface (UPI), a digital payments platform, gaining global traction. 
  • Brazil’s Pix, a real-time payment system widely used across Latin America.

Why is BRICS Challenging SWIFT?

• Desire for Financial Sovereignty: SWIFT, as a key global financial infrastructure, is heavily tied to the USD and it is controlled by the G10 nations, which limits BRICS countries' influence in global financial systems.  
  • A BRICS-led alternative would ensure that member states have a greater say in the rules governing international finance. 
• Protection from US Sanctions: SWIFT has been used by the US and its allies to impose economic sanctions on countries like Russia and Iran, limiting BRICS ability to access global financial markets.  
• Geopolitical Motivations and Diversification:  Rising geopolitical tensions with the West, especially involving Russia and China, have pushed BRICS to reduce vulnerability to Western financial pressure.  
  • BRICS also aims to deepen South–South cooperation by boosting economic ties with developing countries in Africa, Latin America, and Asia through alternative payment systems. 
  • This creates a strategic imperative to build a financial system less reliant on Western institutions. 

What are the Challenges in the Implementation of BRICS Pay? 

• Competing National Payment Priorities: BRICS members are promoting their own systems (China’s CIPS, India’s UPI) which can create friction when deciding whose framework should lead. 
  • China’s economic weight and the wider reach of CIPS (120+ countries) may raise concerns that BRICS Pay could effectively become China-led, making others more cautious. 
• Political Rivalries: Tensions between India and China, particularly over India's reluctance to adopt CIPS in favor of UPI, may hinder cooperation. These geopolitical differences must be resolved for BRICS Pay to succeed. 
• Technical Interoperability: These platforms currently operate differently. Aligning infrastructure, messaging standards, security protocols, and settlement mechanisms is complex and resource-intensive. 
• Lack of Coordinated Monetary Policy: A shared payment architecture requires longer-term coordination on capital flows, exchange rates, and liquidity management, an area where BRICS countries have divergent priorities. 
• External pressure: Threats of retaliation from the US such as tariff warnings, could deter some members from fully committing. 
• Trust Deficit: Countries outside the BRICS bloc may be reluctant to adopt BRICS Pay due to geopolitical concerns, fear of retaliation from the West, or unfamiliarity with the new system.  
  • For BRICS Pay to succeed globally, it will need to secure partners beyond BRICS and convince other countries of its security and benefits. 

What Measures Could Accelerate the Adoption of a BRICS Pay? 

• Strategic Roadmap: A phased strategic roadmap for BRICS Pay should start with bilateral local currency settlements, then evolve into a digital payment network, expanding through regional partnerships in Africa, Latin America, and Central Asia to boost adoption. 
• Incentivizing Participation: Offering benefits like reduced transaction costs compared to SWIFT and faster payments to countries and institutions will encourage adoption of BRICS Pay. 
• Strengthening Interoperability: Ensuring compatibility between national payment systems (CIPS, UPI, Pix, SPFS) is crucial for smooth cross-border transactions. 
• Political Consensus and Cooperation: Overcoming geopolitical rivalries (e.g., India-China tensions) and aligning national interests will help create a unified approach.

Conclusion 

BRICS' challenge to SWIFT aims for financial independence, protection from sanctions, and a more inclusive global financial system. Through initiatives like BRICS Pay and stronger cooperation between national payment systems, BRICS seeks to create a more equitable financial ecosystem.