Launch of PayNow’s connectivity with India UPI, What it means and who is benefited?
To make cross-border transactions for trade, travel, and remittances between the two countries faster, more efficient, and transparent, a project to link the two fast payment systems was started in September 2021.
Today, the Singaporean PayNow network and India’s Unified Payments Interface (UPI), which has enabled swift digital payments through apps like BharatPe and Paytm, were merged to speed up remittances between the two nations at a competitive cost.
In the presence of Prime Ministers Narendra Modi and Lee Hsien Loong of Singapore and Shaktikanta Das, Governor of the Reserve Bank of India, and Ravi Menon, Managing Director of the Monetary Authority of Singapore (MAS), officially unveiled the new linkage.
What are PayNow and UPI?
A virtual payment address (VPA) that the consumer creates allows them to make round-the-clock payments instantaneously using India’s Unified Payments Interface (UPI), a mobile-based fast payment system. It removes the danger of the remitter disclosing bank account information. UPI allows users to transfer or receive money and supports both Person-to-Person (P2P) and Person-to-Merchant (P2M) payments.
Singapore has a quick payment mechanism called PayNow. Peer-to-peer funds transfer services are enabled, and retail clients in Singapore can use them through participating banks and Non-Bank Financial Institutions (NFIs). By utilising merely their mobile number, Singapore National Registration Identity Card (NRIC)/Foreign Identification Number (FIN), or VPA, customers are able to send and receive quick cash from one bank or e-wallet account to another in Singapore.
What does the UPI-PayNow connection mean?
Retail payments made internationally are typically more expensive and less transparent than those made domestically. The G20’s financial inclusion aims of promoting quicker, less expensive, and more transparent cross-border payments are closely aligned with the UPI-PayNow linkage, a critical milestone in the development of infrastructure for cross-border payments between India and Singapore.
According to the G20’s rotating membership system, India is serving as the group’s chair this year. Singapore has been asked to take part in the G20 Summits and its associated processes from 2010 to 2011 and from 2013 to 2023 despite not being a member of the G20.
To make cross-border transactions for trade, travel, and remittances between the two countries faster, more efficient, and transparent, a project to link the two fast payment systems was started in September 2021.
How would it be advantageous to the people of both nations?
Users of the two rapid payment systems will be able to send and receive funds instantly and cheaply thanks to the UPI-PayNow linkage without having to sign up for the other system.
The rapid and inexpensive money transfers from Singapore to India and vice versa will also benefit the Indian diaspora in Singapore, particularly migrant workers and students. According to the RBI Remittance Survey, 2021, Singapore’s proportion of the total inward remittances to India in 2020–21 was 5.7%.