India & Singapore To Link Their Fast Payment Systems, Move Will Boost Cross Border Payment Infrastructure
The UPI-PayNow linkage will enable users of each of the two fast payment systems to make instant, low-cost fund transfers on a reciprocal basis.
Mumbai: One may pay or receive money from Singapore using Unified Payments Interface (UPI), a significant relief to Indians living in Singapore.
The Reserve Bank of India (RBI) and the Monetary Authority of Singapore (MAS) have announced a project to connect their respective quick payment systems, UPI and PayNow, likely to be operational by July 2022.
The UPI-PayNow linkage will enable users of each of the two fast payment systems to make instant, low-cost fund transfers on a reciprocal basis without a need to get onboarded onto the other payment system.
The UPI-PayNow integration is a big step forward in developing cross-border payment infrastructure between India and Singapore. It closely matches the G20's financial inclusion priorities of making cross-border payments faster, cheaper, and more transparent.
The link builds on NPCI International Private Limited (NIPL) and Network for Electronic Transfers (NETS) previous efforts to foster cross-border interoperability of payments using cards and QR codes between India and Singapore. It will help to anchor trade, travel, and remittance flows between the two countries.
"This initiative is also in line with RBI's vision of reviewing corridors and charges for inbound cross-border remittances outlined in the Payment Systems Vision Document 2019-21," said RBI in a statement.
UPI is a mobile-based 'rapid payment' system in India that allows users to make payments at any time using a Virtual Payment Address (VPA) that they generate. This reduces the possibility of the remitter disclosing bank account information. UPI offers both P2P and P2M payments and allows users to send and receive money.
PayNow is a Singaporean quick payment system that facilitates peer-to-peer cash transfers for retail clients through collaborating banks and financial institutions. 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, Singapore NRIC/FIN, or VPA.
"This is a very positive and encouraging announcement. The reduction in time & charges for cross-border payments will help grow trade between India & Singapore. From an investing perspective, this will incentivize more retail investors to access global markets. Currently, they pay up to Rs.3000 in inter-bank charges, which are over & above the LRS processing fees by banks. This eats into their returns and hence discourages small investors from accessing global markets. The project is a welcome initiative, and we look forward to its final rollout," said Asheesh Chanda, Founder, and CEO of Kristal.AI - a global digital-first private wealth platform.
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