Highlights:

  • India and Singapore propose to link their payment systems namely UPI and PayNow to enable users to make instant, low-cost fund transfers
  • RBI opines that the linkage between the UPI-PayNow is a significant milestone in the development of infrastructure for cross-border payments
  • The linkage is expected to anchor trade, travel and remittance flow between both the countries

India and Singapore propose to link their payment systems namely Unified Payments Interface (UPI) and PayNow to enable users to make instant, low-cost fund transfers on a reciprocal basis. The Reserve Bank of India (RBI) and the Monetary Authority of Singapore (MAS) disclosed the project. The linkage is scheduled for operationalization around July 2022.

In a statement released on Tuesday, the Reserve Bank of India stated, “The UPI-PayNow linkage will enable users of each of the two fast payment systems to make instant, low-cost fund transfer on a reciprocal basis without a need to get onboarded onto the other payment system.”

RBI opines that the linkage between the UPI-PayNow is a significant milestone in the development of infrastructure for cross-border payments between India and Singapore and the close aligns with the Group of 20s financial inclusion priorities. The linkage is established on the earlier efforts of NPCI International Pvt. Ltd and Network for Electronic Transfers to strengthen cross-border payments between the two countries using cards and QR codes.

In addition, the linkage is expected to anchor trade, travel and remittance flow between both countries. The initiative is also in correspondence with the RBI’s aim of reviewing corridors and charges for inbound cross-border remittances formulated in the Payment Systems Vision Document 2019-21.

UPI is a mobile-based fast payments system enabling customers to make round-the-clock transactions instantly with a virtual payment address (VPA) created by the customer. The VPA rules out the risk of sharing bank account details by the remitter. The payment system assists both person-to-person and person-to-merchant payments and allows a user to send or receive money.

On the other hand, PayNow is also a fast payment system of Singapore that allows peer-to-peer funds transfer service, available to retail customers through participating banks and non-banking financial institutions in the city-state. Furthermore, it also allows users to send and receive instant funds from one bank or e-wallet account to another within Singapore by using their mobile number, Singapore NRIC/FIN, or VPA.

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