The Reserve Bank of India (RBI) and the Monetary Authority of Singapore (MAS) have announced a collaboration to link their respective quick payment systems, UPI and PayNow. The link is expected to be operational by July 2022.
Users of each of the two rapid payment systems will be able to perform instant, low-cost fund transfers on a reciprocal basis thanks to the UPI-PayNow linkage, which eliminates the need to sign up for the other payment system.
The UPI-PayNow integration is a big step forward in the development of cross-border payment infrastructure between India and Singapore, and it closely matches with 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, and will help to further anchor trade, travel, and remittance flows between the two countries. This programme also aligns with the RBI's aim of revising inbound cross-border remittance routes and levies, as indicated in the Payment Systems Vision Document 2019-21.
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, as well as allowing users to send and receive money.
PayNow is a Singaporean quick payment system that facilitates peer-to-peer cash transfers for retail consumers via partner banks and non-bank financial institutions (NFIs) in the country. It allows users to deposit and receive funds instantly in Singapore from one bank or e-wallet account to another using only their cellphone number, Singapore NRIC/FIN, or VPA.