The Monetary Authority of Singapore (MAS) and the Reserve Bank of India (RBI) have announced a project to link India’s UPI and Singapore’s PayNow fast payment systems.
The linkage, which is expected to be realised by July 2022, aims to facilitate instant and low-cost fund transfers for both UPI and PayNow users.
Being a reciprocal arrangement, it does not require users to get onboarded onto the other payment system.
UPI allows customers to make and receive payments instantly using a Virtual Payment Address (VPA).
This mobile-based payment system eliminates the need for sharing bank account details by the remitter. It supports both Person to Person (P2P) and Person to Merchant (P2M) payments.
PayNow 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 NRIC/FIN, or VPA.
When implemented, the UPI-PayNow linkage will enable users to transfer funds from India to Singapore using mobile phone numbers, and from Singapore to India using UPI VPA.
It builds on the previous collaboration between NPCI International and Network for Electronic Transfers to boost cross-border interoperability of payments between both countries using cards and QR codes.
RBI called the linkage a ‘significant milestone’ in the development of infrastructure for cross-border payments between India and Singapore.
The move is also in line with the G20’s financial inclusion target to facilitate faster, cheaper and more transparent cross-border payments.
Furthermore, the linkage is expected to lead to increased volumes of remittance traffic, multi-entity participation, and automation of capital control rules.
It is also expected to bring in enriched message formats to house future innovation by both countries.
MAS chief fintech officer Sopnendu Mohanty said: “By reducing the cost and inefficiencies of remittances between Singapore and India, the PayNow-UPI linkage will directly benefit individuals and businesses in Singapore and India that greatly rely on this mode of payment.
“Given that PayNow and UPI are integral components of their respective national digital infrastructures, the link between the two systems also paves the way for establishing more comprehensive digital connectivity and interoperability between the two countries.”