In what is a first-of-its-kind collaboration with another country, India and Singapore on February 21 linked their respective online payments systems – Unified Payments Interface (UPI) of India and PayNow of Singapore – for seamless cross-border transactions between the two countries.
Prime Minister Narendra Modi and his Singaporean counterpart Lee Hsien Loong attended the virtual launch function.
How will it benefit the citizens of both countries?
The linkage of these two payment systems of both countries would enable residents of both countries to the faster and more cost-efficient transfer of cross-border remittances. People in both countries will be able to send money in real-time via QR-code based or simply by entering mobile numbers linked to the bank account.
“The linking of fintech services between India and Singapore will take the technology to a new level,” PM Modi said at the launch event.
“It will provide low-cost real-time platform for remittance transfers to people in both countries,” PM Modi said.
Shaktikanta Das, Governor of the Reserve Bank of India (RBI), and Ravi Menon, managing director of the Monetary Authority of Singapore (MAS), the country’s apex financial authority, also presided over the launch event.
India has emerged as one of the fastest-growing ecosystems for fintech innovation and the PM Modi-led Government has been instrumental in driving the globalisation of India’s digital payment infrastructure.
A key emphasis of PM Modi has been on ensuring that the benefits of UPI are not limited to India only but other countries, too, benefit from it.
This collaboration will also help the Indian diaspora in Singapore, especially migrant workers and students, through instantaneous and low-cost transfer of money from Singapore to India and vice-versa.
Separately, taking into account the popularity of the UPI payment system, the Reserve Bank of India proposed to permit all inbound travellers to India to use UPI for their merchant payments while they are in the country.
Singaporean High Commissioner to India Simon Wong Wie Kuen said that this collaboration would take bilateral relations to greater heights and his country looks forward to continuing to be part of India’s digital transformation journey.
“As India’s 1st first cross-border real-time payment partner, this milestone initiative reflects the deep trust between both countries, and will take bilateral relations to even greater heights. We look forward to continue to be part of India’s digital transformation journey,” the envoy said in a tweet.
This collaboration will also help the Indian diaspora in Singapore, especially migrant workers and students, through instantaneous and low-cost transfer of money from Singapore to India and vice-versa.
UPI payments system has become hugely popular for retail digital payments in India, and its adoption is increasing at a rapid pace.
On February 8, the RBI governor announced while deliberating upon the outcome of the three-day monetary policy committee meeting.
To begin with, the facility will be extended to travellers from G-20 countries arriving at “select international airports”.
What is UPI?
Unified Payments Interface (UPI) is a payment system that allows users to link more than one bank account in a single smartphone app and make fund transfers without providing an IFSC code or account number. This is a real-time payment system where funds are credited instantly on a real-time basis.
What is PayNow?
PayNow is a fast payment system in Singapore. It enables peer-to-peer funds transfer service, available to retail customers through participating banks and Non-Bank Financial Institutions (NFIs) in Singapore. It allows users to send and receive instant funds from one bank or e-wallet account to another in Singapore by using just their mobile number, Singapore National Registration Identity Card (NRIC)/Foreign Identification Number (FIN), or VPA.
What is UPI-PayNow linkage?
Cross-border retail payments are generally less transparent and more expensive than domestic transactions. The UPI-PayNow linkage is a significant milestone in developing infrastructure for cross-border payments between India and Singapore. It closely aligns with the G20’s financial inclusion priorities of driving faster, cheaper and more transparent cross-border payments.
