India’s real-time retail payment system Unified Payments Interface (UPI) has been linked with its equivalent network in Singapore called PayNow to enable faster remittances between the two countries. With this, people in both countries can send money in real time via a QR code or by simply entering the mobile number linked to their bank accounts.

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Understanding UPI and PayNow

UPI is an instant real-time payment system developed by National Payments Corporation of India (NPCI). The interface facilitates inter-bank peer-to-peer and person-to-merchant transactions. PayNow, on the other hand, is a near-instant real-time payment system developed by Association of Banks in Singapore.

Decoding the integration

With the integration, residents of Singapore and India can instantly transfer money to each other via UPI and PayNow.

In India, the 24x7 cross-border connectivity project can be utilised by using Google Pay, Paytm and other similar digital payment systems to transfer money. People from Singapore can similarly use their virtual payment to transfer money to India.

Key advantages

According to a Paytm spokesperson, the linkage will enable low-cost, instant fund transfers between the two countries.

"Singapore is one of the top four inward remittance markets, accounting for approximately 5.7 percent of total remittances to India, or about $5.08 billion of the $100 billion total inward remittance market. A digital linkage between India’s UPI and Singapore’s Pay Now means a seamless real-time fund transfers will be available for citizens of both countries, allowing for economic growth, cultural development, and social cohesion," said Mehul Mistry, Global Head-Strategy, Digital Financial Services & Partnerships at Wibmo.

Mistry also said that the facility to scan QR codes and carry out quick and cost-effective transactions across geographical boundaries will be made possible for the Indian diaspora in Singapore, consisting largely of workers and students. "The move is an example of leveraging technological innovations for a better payment ecosystem," added Mistry.

As per the ministry of external affairs (MEA) document Population of Overseas Indians (2022), there are approximately 6.5 lakh Indians, including non-resident Indians and persons of Indian origin, currently residing in Singapore.

The Reserve Bank of India (RBI) said that the linkage will be a significant milestone in the development of next-generation infrastructure for cross-border payments between India and Singapore. It will also closely align with the G20's financial inclusion priorities of driving faster, cheaper and more transparent cross-border payments.

UPI milestones

Last month, NPCI asked UPI ecosystem to allow users from some countries with non-resident account types like non-resident external (NRE) and non-resident ordinary (NRO) accounts with international mobile numbers to transact through UPI. Consequently, PhonePe launched support for cross-border UPI payments, under UPI International. The apps' users can use their Indian bank accounts to pay at merchant outlets in the UAE, Singapore, Mauritius, Nepal and Bhutan.

RBI has also proposed to allow foreign tourists to make merchant payments while in India via United Payments Interface (UPI). The system allows users to link their bank accounts to related apps such as Paytm, PhonePay, and Google Pay, among others, to make merchant payments and fund transfers.