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India and Singapore launch UPI-PayNow cross-border payment system
It will enable users of two fast payments systems to transfer funds instantly without the need to getting onboard the other payment system.
Prime Minister Narendra Modi and his Singapore counterpart Lee Hsien Loong on Tuesday launched cross-border connectivity between the Unified Payments Interface (UPI) of India and PayNow of Singapore.
This will enable low-cost, faster and 24x7 cross-border payments by Indians using Google Pay, Paytm and other similar digital payment systems to transfer money to people in Singapore and vice versa.
What is UPI?
UPI or Unified Payments Interface, is a quick payment method through which funds can be transferred instantaneously through mobile number. It was developed by National Payments Corporation of India (NPCI), which eleminates the risk of sharing bank account details through creation of a Virtual Payment Address (VPA). It supports both Person-to-Person (P2P) and Person-to-Merchant (P2M) payments.
What is PayNow?
Just like UPI, Singapore has PayNow facility. The users an send and receive funds from one bank or e-wallet account to another with mobile number. This peer-to-peer payments linkage is enabled through participating banks and Non-Bank Financial Institutions (NFIs) in the country.
How will the linkage between UPI-PayNow help?
Generally, cross border payments are expensive. The UPI-Pay Now integration will enable fund transfers from India to Singapore using mobile phone numbers, and vice versa using UPI virtual payment addresses.
People in both the countries will be able to send money real-time via QR-code based or simply by entering mobile numbers linked to the bank account.
It will enable users of two fast payments systems to transfer funds instantly without the need to getting onboard the other payment system.
The project is expected to greatly benefit the Indian diaspora, especially migrant workers and students, in Singapore as it allows faster and cost-efficient funds transfer across both countries.
According to the RBI Remittance Survey, 2021, Singapore figures in the top four inward remittances market for India
The RBI said that the linkage will be a significant milestone in the development of next-generation infrastructure for cross-border payments between India and Singapore. It will also closely align with the G20's financial inclusion priorities of driving faster, cheaper and more transparent cross-border payments.
"Integration of UPI and Singapore's PayNow with India is ready and waiting for launch," Singapore central bank's chief fintech officer Sopnendu Mohanty said at the G20 meeting on financial inclusion.
"As of now, remittance to India is at least 1 billion Singapore Dollars and India to Singapore will be 200-300 million Singapore Dollars," Mohanty said.
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First Published:21 Feb 2023, 12:10 PM IST
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