India and Singapore will link their respective fast payment systems- Unified Payments Interface (UPI) and PayNow to enable users to make instant, low-cost fund transfers on a reciprocal basis, the Reserve Bank said on Tuesday.
The Reserve Bank of India (RBI) and the Monetary Authority of Singapore (MAS) announced the project to link the fast payment systems. The linkage is targeted for operationalisation by July 2022, the RBI said in a statement.
"The UPI-PayNow linkage will enable users of each of the two fast payment systems to make instant, low-cost fund transfers on a reciprocal basis without a need to get onboarded onto the other payment system," it said.
RBI said 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 linkage builds upon the earlier efforts of NPCI International Private Limited (NIPL) and Network for Electronic Transfers (NETS) to foster cross-border interoperability of payments using cards and QR codes, between India and Singapore.
It will further anchor trade, travel, and remittance flow between the two countries. This initiative is also in line with RBI's vision of reviewing corridors and charges for inbound cross-border remittances outlined in the Payment Systems Vision Document 2019-21.
It is to be mentioned here that UPI is a mobile-based fast payment system that facilitates customers to make round-the-clock payments instantly using a Virtual Payment Address (VPA) created by the customer.
This eliminates the risk of sharing bank account details by the remitter. UPI supports both Person-to-Person (P2P) and Person-to-Merchant (P2M) payments and enables a user to send or receive money.
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) in Singapore.
It enables users to send and receive instant funds from one bank or e-wallet account to another in Singapore by using just their mobile number, Singapore NRIC/FIN, or VPA.