The Monetary Authority of Singapore (MAS) and the Reserve Bank of India (RBI) have linked Singapore’s PayNow and India’s Unified Payments Interface (UPI). According to a press release, customers of eligible financial institutions in Singapore and India will be able to transfer funds between bank accounts or e-wallets in real-time across both countries.
Users can transfer money using a mobile phone number, UPI identity, or Virtual Payment Address (VPA). The connection offers customers a safe, simple, and cost-effective way to make cross-border fund transfers. The launch was officiated by the Prime Minister of Singapore, Lee Hsien Loong, and the Prime Minister of India, Narendra Modi.
The PayNow-UPI linkage is the first-ever real-time payment systems linkage to use a scalable cloud-based infrastructure that can handle future increases in the volume of remittance traffic. It is also the first linkage to have a non-bank financial institution as a participant.
Under a phased approach, the service will be made available to Singapore customers of two selected banks. Till March-end 2023, these institutions will progressively increase the number of eligible user groups and transaction limits.
Indian customers of all participating Indian banks will be able to receive funds through the service from the onset. Sending of funds is limited to customers of four Indian banks at the time of launch, including the State Bank of India, with this scope to be gradually expanded.
The involved financial institutions will make sure that the service is affordable and easily accessible, even for foreign students and workers residing in Singapore and India. As a result, they will be able to conduct low-cost cross-border remittances to and from their home countries.
The linkage incorporates the automatic integration of capital control regulations to enhance efficiency. MAS and RBI will evaluate and gradually expand the linkage by adding more participating financial institutions and expanding applicable use cases.
Extensive collaboration among MAS, RBI, payment system operators, payment scheme owners, participating banks, and non-bank financial institutions led to the creation of the PayNow-UPI linkage. This linkage is a significant achievement in improving the infrastructure for cross-border payments and aligns with India’s G20 Presidency priorities to enhance the speed, accessibility, transparency, and affordability of cross-border payments.
Earlier this month, the Indian Minister for Electronics and Information Technology, Ashwini Vaishnaw, launched the Digital Payments Utsav, a comprehensive campaign to promote digital payments across India. As OpenGov Asia reported, the Digital Payments Utsav aims to showcase India’s journey of digital transformation, with a series of events and initiatives to be held over the next few months.
The focus of the campaign will be on promoting digital payments in the country, specifically in Lucknow, Pune, Hyderabad, and Bengaluru. The campaign is expected to bring together stakeholders, including the government, industry, and citizens, to drive the growth of the digital economy and promote financial inclusion.
Over the last three years, digital payment transactions have registered unprecedented growth in India. Easy and convenient modes of digital payment, such as UPI, Immediate Payment Service (IMPS), pre-paid payment instruments (PPIs), and National Electronic Toll Collection (NETC) system have registered substantial growth and have transformed the digital payment ecosystem by increasing person-to-person and person-to-merchant payments in India.
