With an aim to help migrant workers, India and Singapore have finalised the technical measures to connect their fast payment systems PayNow and UPI that will allow smooth transfer of funds between the two countries at a low cost.
The project targeted at linking the United Payments Interface (UPI) and PayNow was being developed by the Reserve Bank of India (RBI) and Singapore's central bank, the Monetary Authority of Singapore (MAS). The project is expected to launch very soon. "Singapore wants to connect its PayNow with UPI and that project will finish sometime in the next few months when that happens anybody sitting in Singapore will be able to send money to their family members in India," India's High Commissioner in Singapore P Kumaran told ANI.
Prime Minister Narendra Modi is expected to make an announcement once the project is formalized. Indian envoy to Singapore said the facility will enable to transfer money at a fraction of the money charged by the standard money transfer companies. "For us, the practical implications sitting here is that any worker who wants to send small amounts can do so at a fraction of the money they are being charged by the standard money transfer companies. So it is going to be a big benefit to those who instead of sending money in one go can do so in small pieces and it will still cost less," he said.
Even though the envoy didn’t comment on the announcement date, the development comes ahead of the Asean and related summits, which kicked off in the Cambodian capital of Phnom Penh. The event is witnessing the participation of leaders of the 10-member regional bloc.
PayNow functions just like the home-grown card payment network RuPay. Apart from this, it has linkages with other countries of Asean making it easier for people to buy and sell within the region.
Under the proposed linkage, money can be transferred from India to Singapore using mobile phone numbers and from Singapore to India using UPI virtual payment address (VPA).
As of now, an estimated 2 lakh workers come to Singapore to work for brief periods and they often send money back home. The UPI-PayNow will go on to benefit migrant workers who typically expend around 10 per cent as fees charged by banks for money transfers.
"PayNow also has similar initiatives with other countries in Asean so when PayNow connects this side with India and that side with Asean countries they can go from India to any Asean country through Singapore. They currently have a project with the Philippines,” the Indian ambassador added.