New Delhi: The Reserve Bank of India (RBI) and the Monetary Authority of Singapore (MAS) announced a project to link their respective fast payment systems — Unified Payments Interface (UPI) and PayNow on Tuesday. The project will help in facilitating instant low cost cross border fund transfer on a reciprocal basis, without a need to get onto the other payment system. RBI on its press release stated that the linkage is targeted to be operationalised by July 2022.
This initiative is also said to be another milestone on RBI’s vision of reviewing corridors and charges for inbound cross-border remittances, outlined in the Payment Systems Vision Document 2019-21.
‘The UPI-PayNow linkage is a significant milestone in the development of infrastructure for cross-border payments between India and Singapore, and closely aligns with the G20’s financial inclusion priorities of driving faster, cheaper and more transparent cross-border payments. The UPI-PayNow linkage will enable users of each of the two fast payment systems to make instant, low-cost fund transfers ‘, RBI said in the statement.
‘The linkage builds upon the earlier efforts of NPCI International Private Ltd (NIPL) and Network for Electronic Transfers (NETS) to foster cross-border interoperability of payments using cards and QR codes, between India and Singapore and will further anchor trade, travel and remittance flows between the two countries’, the statement added.
UPI is the mobile based, ‘fast payment’ system of India, that facilitates customers to make round the clock payments immediately, using a Virtual Payment Address (VPA) made by the customer. This eliminates the risk of sharing bank account details by the remitter. UPI enables a user to send or receive money and supports both Person to Person (P2P) and Person to Merchant (P2M) transactions.
Similar to UPI, PayNow is the fast payment system of Singapore, that enables peer-to-peer funds transfer service, available to retail customers through participating banks and Non-Bank Financial Institutions (NFIs) within Singapore. This enables its users to send and receive instant funds from one bank or e-wallet account to another just by using their mobile number, Singapore NRIC/FIN, or VPA.