All You Need to Know About India’s UPI and Singapore’s PayNow Linkage

 

In 2021, with more than 6,50,000 Indians residing in Singapore, the two major economies of India and Singapore had cross-border transactions amounting to over US $1 billion a year. To disrupt the cross-border transfer of money and provide instant low-cost fund transfers, the two nations announced the linkage of their digital payment systems.

A press conference on Feb 21, 2023, confirmed that India and Singapore citizens can now use their local payment systems to make instant transfers in real-time to the foreign land. They also expressed that currently, eight banks from India and Singapore have collaborated to facilitate the deal.

The linkage was launched by Prime Minister (PM) Narendra Modi of India and Prime Minister (PM) Lee Hsien Loong of Singapore. To demonstrate the linkage, the Governor of the Reserve Bank of India (RBI), Mr Shaktikanta Das and the MD of the Monetary Authority of Singapore (MAS), Mr. Ravi Menon, made live cross-border money transfers using their mobile phone handsets.

The linkage between UPI and PayNow

Out of the total inward remittances in India, Singapore accounts for 5.7% of the total remittances. It is one of the top four inward remittance markets for India. According to the RBI Governor Das, the linkage is going to ease the norms on private transfer receipts in India, which showed an almost 30% hike in year-on-year international transfer amounts. The private transfer receipts represent the Indians working overseas and transferring funds back home.

The Indian UPI system offers banks and payment apps to operate efficiently among all the other available applications. One can make payments and fund transfers to other institutions’ bank accounts and another app with their registered UPI IDs. The system is adopted by global institutions like Google, Amazon, Walmart and Facebook to process payment transfers within India. The PayNow application in Singapore also enables interoperability between banks and payment apps for fund transfers like the UPI app.

Increasing Trust of Indian UPI

India’s (UPI) Unified Payment Interface, a payment infrastructure developed with the help and coalition of the central and retail banks, has proven to be the best comfortable way for payment transfers. It’s been seven years since the system was adopted, and highly praised for its efficient use and transparency by Indians. UPI enables the person to send and receive money around the clock. It supports all customer-to-business, person-to-person and business-to-business transactions.

Exploring Synergies of Indian and Singaporean UPIs

India’s (UPI) Unified Payment Interface, a payment infrastructure developed with the help and coalition of the central and retail banks, has proven to be the best comfortable way for payment transfers. Its been seven years since the system was adopted, and highly praised for its efficient use and transparency by Indians. UPI enables the person to send and receive money around the clock. It supports all customer-to-business, person-to-person and business-to-business transactions.

Exploring Synergies of Indian and Sin

Like UPI in India, Singapore has PayNow as the fastest payment system in the country. The payment system enables fund transfers for retail customers through banks and non-banking financial institutions across Singapore. Singapore citizens need to register their contact numbers and link the National Identity Card with their financial account.

The need to record, share and register the bank details of both parties with the two to three days buffer for international fund transfers have been eliminated by the deal between the two countries. Earlier, the cross-nation transfer and numerous bank charges increased the total amount for payments made by its citizens and businesses.

The users of India’s UPI and Singapore’s PayNow users will be able to make instant fund transfers safely with records across the countries without any government intervention. Any UPI user from India can make instant payments to any PayNow user in Singapore and vice versa. The UPI user from India would need a registered PayNow mobile number or the Virtual Payment Address (VPA) of the receiver in Singapore while the PayNow user from Singapore would need a registered UPI ID of the Indian receiver to make hassle-free payments across international borders.

Indian Institutions offering inward and outward remittance in these services are the State Bank of India, Indian Bank, Indian Overseas Bank, ICICI Bank and Axis Bank with DBS India for inward remittance only. Singaporeans can make instant transfers with the DBS Singapore and Liquid Group. In later years, more major banks from both nations would be engaged.

Conclusion

According to Citi Bank, around USD 500 billion are transferred in cross-border remittances every year with high transfer fees across countries. On average the cost of sending money internationally is around 6.5% currently. Utilizing common payment systems across borders can facilitate transparency with lower charges and efficient transfer of funds. It will also anchor trade, travel, and remittance flow between India and Singapore for years to come.