On Tuesday, September 14, the Reserve Bank of India (RBI) and the Monetary Authority of Singapore (MAS) announced a project to link their respective fast payment systems — Unified Payments Interface (UPI) and PayNow. This will facilitate instant low-cost cross border fund transfer.
The linked interface is expected to be operationalised by July 2022. "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 RBI added that the UPI-PayNow linkage closely aligns with the G20's financial inclusion priorities of driving faster, cheaper and more transparent cross-border payments. It will further anchor trade, travel and remittance flows between the two countries, the bank said.
What Is UPI and PayNow?
UPI is India's mobile-based, 'fast payment' system that facilitates customers to make round the clock payments. instantly. It does so by using a Virtual Payment Address (VPA) created by the customer. This abolishes the risk of sharing bank account details by the remitter. The system supports Person to Person (P2P) as well as Person to Merchant (P2M) payments and also enables a user to send or receive money.
Like the Indian system, PayNow is also an electronic fund transfer service that allows a user to send and receive 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).
RBI said that the linkage 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.
Earlier NIPL had partnered with Mashreq Bank for acceptance of UPI payments in the Middle East. In July, Bhutan became the first neighbouring country to use the UPI platform for payments.