The Reserve Bank of India (RBI) and the Monetary Authority of Singapore (MAS) will link their fast payment systems, Unified Payments Interface (UPI) and PayNow, which is expected to make fund transfers quicker and cheaper.
The aim is for the service to be effective from July 2022. It will be a "milestone in the development of infrastructure for cross-border payments", said the Indian central bank in a press statement. The linkage will be reciprocal and won’t need users to get "onboarded" onto either payment system.
The project closely aligns with the G20's financial inclusion priorities of driving faster, cheaper and more transparent cross-border payments.
An official statement said it will further anchor trade, travel and remittance flows 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.
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 is the fast payment system of Singapore which enables peer-to-peer funds transfer service, available to retail customers through participating banks and Non-Bank Financial Institutions (NFIs) in Singapore.