The Monetary Authority of Singapore (MAS) and the Reserve Bank of India has announced that they plan to link both country’s real-time payment systems on Sept 14.
Singapore’s PayNow and India’s Unified Payments Interface (UPI) will be linked by July 2022, announced the central banks from both countries.
The link will enable users to make instant, low-cost fund transfers directly from one bank account to another between Singapore and India.
The link also builds on the collaboration between NETS and NPCI International Private Limited (NIPL) in 2018 to enable the use of India’s Bharat Interface for Money QR to make QR payments at selected NETS merchants using NETS’ QR code.
Once implemented, fund transfers from India to Singapore can be made via mobile phone numbers. On the other hand, fund transfers from Singapore to India can be made using UPI virtual payment addresses (VPA).
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The transfer process from PayNow to UPI will be similar to that of a domestic transfer to a PayNow VPA.
A PayNow VPA is used by non-bank financial institutions that are connected to PayNow and FAST. They rely on VPAs to send and receive real-time payments from other e-wallet users.
According to MAS and India’s central bank, the link will provide for “increased volumes of remittance traffic, multi-entity participation, automation of capital control rules and enriched message formats to accommodate future innovation by linkage participants”.
The connectivity between both payment services is considered a “milestone” in the development of cross-border payments between Singapore and India. It is also closely aligned with the G20’s financial inclusion priorities of driving quicker, cheaper and more transparent cross-border payments.
“By reducing the cost and inefficiencies of remittances between Singapore and India, the PayNow-UPI linkage will directly benefit individuals and businesses in Singapore and India that greatly rely on this mode of payment,” says Sopnendu Mohanty, Chief FinTech Officer of MAS.
“Given that PayNow and UPI are integral components of their respective national digital infrastructures, the link between the two systems also paves the way for establishing more comprehensive digital connectivity and interoperability between the two countries,” he adds.