The global payments firm launched a new brokerage payments solution that lets international financial institutions settle transactions with certain U.S. brokerages. This system is up to 90% cheaper to use than SWIFT.

Why should we care?
By expanding the range of global payments frameworks available to financial institutions, this new system bridges the gap between (1) a decentralizing and anti-monopoly ethos and (2) concerns over compliance and security. If this product grows in line with Nium’s vision, it could successfully upend SWIFT’s dominance over much of the global payments ecosystem—especially between the U.S. and other markets. Lower transaction costs could also lead to more trade. “Nium's new solution dramatically lowers the expense of these transactions, allowing FIs to either share cost savings with their customers or re-invest profits in the business,” said Frederick Crosby, Chief Revenue Officer at Nium. On the other hand, this new service raises broader geopolitical questions. Nium is based in Singapore, which has joined the U.S., E.U., and other countries in imposing sanctions against Russia for its invasion of Ukraine. As such, Nium is required to prevent Russian entities from circumventing sanctions through its services. But, if Nium-esque products proliferate, then we may see SWIFT become a weaker tool in sanctions-based arsenals over the coming years.