On February 21, the Singaporean PayNow network and India’s Unified Payments Interface (UPI), which has enabled swift digital payments through applications like PhonePe and Paytm, were merged to speed up transfers between the two nations at an economical price.
In the attendance of Prime Ministers of both nations and Shaktikanta Das, Chairman of the Reserve Bank of India, and Ravi Menon, Director of the MAS, officially unveiled the new connection.
According to the RBI’s press release, “ The UPI-PayNow linkage is the product of extensive collaboration between Reserve Bank of India (RBI), Monetary Authority of Singapore (MAS), and Payment System Operators of both countries viz. NPCI International Payments Limited (NIPL) and Banking Computer Services Pte Ltd. (BCS), and participating banks / non-bank financial institutions. This interlinkage aligns with the G20’s financial inclusion priorities of driving faster, cheaper, and more transparent cross-border payments and will be a significant milestone in the development of infrastructure for cross-border payments between India and Singapore.”
Unified Payments Interface (UPI)
In India, the UPI is an instantaneous payment that enables inter-bank operations by quickly moving funds across two bank accounts via a mobile platform. It was established in 2016 by the National Payments Corporation of India and is governed by the Central Monetary Authority of India, i.e. RBI.
The UPI system is an open-source platform that enables users to transfer funds between bank accounts without providing bank account details or IFSC codes. Instead, users can simply use their mobile phone number and a Virtual Payment Address (VPA) to initiate transactions.
In addition, to fund transfers, the UPI system supports various other services, including bill payments, mobile recharges, and online shopping. It has gained widespread adoption in India due to its ease of use, security, and convenience. The UPI system has revolutionised digital payments in India and has significantly contributed to the growth of the country’s digital economy.
PayNow
PayNow is a-to-peer funds transfer service in Singapore. It allows individuals and businesses to make and receive payments securely and instantly using their mobile phone or internet banking app. It was set up in 2017 by the Association of Banks in Singapore (ABS) and is supervised by the Monetary Authority of Singapore.
To use PayNow, users must link their bank account to their mobile number or National Registration Identity Card (NRIC) number. Once the account is linked, they can make and receive payments by entering the recipient’s mobile number or NRIC number. It is widely used for a range of transactions, including splitting bills, paying for purchases at small businesses, and making charitable donations. It has gained popularity in Singapore due to its ease of use, security, and instant transfer of funds.
Benefits of the Integration
The UPI-PayNow integration will enable consumers of the two payment systems – UPI and PayNow – to perform immediate bilateral transactions without utilising the other payment platform. Through the use of the UPI system, Indian visitors and academics in Singapore would be able to begin quick and low-cost transfers from India to Singapore and vice versa. Similarly, Singaporeans in India could make fast and reciprocal transfers and purchases back to Singapore using the PayNow system.
