The UPI-PayNow linkage will enable the users to make low-cost and instant fund transfers without the requirement of going on to another payment system.
The Reserve Bank of India has tied up with MAS (Monetary Authority of Singapore) to facilitate the linking of India’s UPI with Singapore’s PayNow. The linking will be operational from July 2022.
According to RBI, this linking project is an important landmark in the infrastructural development of cross-border payments between the two countries. This project makes parallel with the G20s financial inclusion primacies of providing cheaper, faster, and more transparent cross-border payments.
RBI added that the launch of the UPI-PayNow linkage system has been built upon past efforts of NIPL (NPCI International Private Limited) and NETS (Network of Electronic Fund Transfers) to nurture cross-border interface of payments using QR Codes and cards between Singapore and India. This will further anchor travel, trade, and remittance flows between India and Singapore.
The initiative also aligns with the Reserve Bank of India’s vision of reviewing charges and corridors for inbound cross-border remittances defined in the Payment Systems Vision Document 2019-21.
UPI or Unified Payment Interface is a fast payment system that allows users to make instant payments 24*7 using Virtual Payment Address (VPA) created by the user from their mobile phones. The risk of sharing bank account details is eliminated.
UPI supports both P2M (Person-to-Merchant) and P2P (Person-to-Person) payments, thus enabling users to receive or send money.
Much like India’s UPI, PayNow is an electronic fund transfer system that allows the consumers to do instant fund transfers to a payee using a mobile number or UEN or FIN/NRIC number instead of the bank account number.
Singapore’s PayNow supports three NFIs (Non-Bank Financial Institutions) and 9 participating banks.