The Reserve Bank of India (RBI) and the Monetary Authority of Singapore (MAS) have announced a project to link their respective fast payment systems. This means that the Unified Payments Interface (UPI) of India and ‘PayNow’ of Singapore will be linked with each other.
The linkage is targeted for operationalisation by July 2022, said an official press release. The linkage will allow users of the fast payment systems to make instant and low-cost fund transfers on a reciprocal basis. This will be done without a need to get onboarded onto the other payment system.
The linkage is a significant milestone in the development of infrastructure for cross-border payments between India and Singapore. Furthermore, it also aligns with the G20’s financial inclusion priorities of driving faster, cheaper and more transparent cross-border payments.
The linkage builds upon the earlier efforts of NPCI International Private Limited (NIPL) and Network for Electronic Transfers (NETS). The efforts were to foster cross-border interoperability of payments using cards and QR codes between India and Singapore. Moreover, it will further anchor trade, travel and remittance flows between the two countries as well.
UPI & PayNow
UPI is India’s mobile-based, ‘fast payment’ system that facilitates customers to make 24-hour payments instantly using a Virtual Payment Address (VPA) created by the customer. Furthermore, this eliminates the risk of sharing bank account details by the remitter. UPI supports both Person to Person (P2P) and Person to Merchant (P2M) payments as also it enables a user to send or receive money.
PayNow is the fast payment system of 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 enables users to send and receive instant funds from one bank or e-wallet account to another in Singapore. This is done by using just their mobile number, Singapore NRIC/FIN, or VPA.