Unified Payments Interface (UPI) allows users to instantly transfer money 24/7.(Representative Photo)
Unified Payments Interface (UPI) allows users to instantly transfer money 24/7.(Representative Photo)

India, Singapore announce linking of UPI and PayNow fast payment systems

The Reserve Bank of India (RBI) said in a release that UPI-PayNow linkage will enable users of each system to make instant, low-cost fund transfers on a reciprocal basis without a need to get onboarded onto the other payment system.
By hindustantimes.com, Hindustan Times, New Delhi
PUBLISHED ON SEP 14, 2021 11:36 AM IST

The Reserve Bank of India (RBI) and the Monetary Authority of Singapore (MAS) on Tuesday announced a project to link their respective fast payment systems. The linked interface is expected to be operationalised by July, 2022.

While India uses Unified Payments Interface (UPI) as a fast payment method, Singapore uses the PayNow system.

The RBI said in a release that UPI-PayNow linkage will enable users of each system to make instant, low-cost fund transfers on a reciprocal basis without a need to get onboarded onto the other payment system.

What are the UPI and PayNow systems?

UPI is India's 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 as also it enables a user to send or receive money.

PayNow, much like the Indian system, is also an electronic fund transfer service that allows a user to transfer funds instantly to a payee, using his/her mobile number or NRIC/FIN or UEN number instead of his/her bank account number.

PayNow supports nine participating banks and three Non-Bank Financial Institutions (NFIs).

A significant milestone

The RBI said that the linkage will be a significant milestone in the development of infrastructure for cross-border payments between India and Singapore. It will also closely align with the G20's (an intergovernmental forum comprising 19 countries and the European Union) financial inclusion priorities of driving faster, cheaper and more transparent cross-border payments.

The vision

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, said the RBI, adding that it will further anchor trade, travel and remittance flows between the two countries.

This initiative is also in line with the central bank's vision of reviewing corridors and charges for inbound cross-border remittances outlined in the Payment Systems Vision Document 2019-21.

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