MUMBAI: 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 by July 2022.
Under this initiative, India’s home-grown payments system, the Unified Payments Interface (UPI), will be linked to Singapore’s PayNow.
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, the RBI said in a statement.
“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,” it said.
The linkage, RBI said, builds upon the earlier efforts of NPCI International Private Ltd (NIPL) and Network for Electronic Transfers (NETS) to foster cross-border interoperability of payments using cards and QR codes between India and Singapore and will anchor trade, travel and remittance flows between the two countries. The central bank also said the initiative is in line with its vision of reviewing corridors and charges for inbound cross-border remittances outlined in the Payment Systems Vision Document 2019-21.
Singapore’s PayNow enables peer-to-peer funds transfer service and is 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.
UPI, meanwhile, has seen tremendous growth as mobile-based payments have gained traction in India. Data compiled by Motilal Oswal showed UPI continues to witness robust growth, with total payments growing around 109% year-on-year in July to ₹6.1 trillion.
“Ticket size in UPI though has moderated slightly to Rs1,870 from Rs1,950 in June,” Motilal Oswal said in a report on 1 September.
Experts said the reduction in time and charges for cross-border payments will help boost trade between India and Singapore.
“From an investing perspective, this will incentivize more retail investors to access global markets. Currently, they pay up to ₹3,000 in inter-bank charges which are over and above the Liberalised Remittance Scheme (LRS) processing fees by banks. This eats into their returns and hence discourages small investors from accessing global markets,” said Asheesh Chanda, founder and chief executive of Kristal.AI, a global digital-first private wealth platform
Never miss a story! Stay connected and informed with Mint.
our App Now!!