India and Singapore are linking respective fast payment systems
India and Singapore are linking their respective fast payment systems — Unified Payments Interface (UPI) and PayNow — in a move that will boost remittances between the two nations.
The step will enable users to make instant, low-cost fund transfers on a reciprocal basis, the Reserve Bank of India (RBI) said on Tuesday.
Both the RBI and the Monetary Authority of Singapore (MAS) announced the project to link the fast payment systems. The Indian central bank said in a statement that the linkage is targeted for operationalisation by July 2022.
The RBI added that the UPI-PayNow linkage is a significant milestone in the development of infrastructure for cross-border payments between India and Singapore, and closely aligns with the G20’s financial inclusion priorities of driving faster, cheaper and more transparent cross-border payments.
The linkage builds upon the earlier efforts of NPCI International Pvt Ltd (NIPL) and Network for Electronic Transfers (NETS) to foster cross-border interoperability of payments using cards and QR codes, between India and Singapore.
It is expected to further anchor trade, travel and remittance flows between the two countries. This initiative is also in line with the RBI’s vision of reviewing corridors and charges for inbound cross-border remittances outlined in the Payment Systems Vision Document 2019-21.
UPI is a mobile-based fast payment system that facilitates customers to make round the clock payments instantly using a Virtual Payment Address (VPA) created by the customer.
This eliminates the risk of sharing bank account details by the remitter. UPI supports both Person-to-Person (P2P) and Person-to-Merchant (P2M) payments and enables a user to send or receive money.
On the other hand, PayNow is the fast payment system of Singapore which enables peer-to-peer funds transfer service, available to retail customers through participating banks and Non-Bank Financial Institutions (NFIs) in the nation. It enables users to send and receive instant funds from one bank or e-wallet account to another in Singapore by using just their mobile number, or their VPA.