UPI-PayNow linkage is in line with RBI’s vision of reviewing corridors and charges for inbound cross-border remittances
UPI to PayNow Money Transfer: The Reserve Bank of India (RBI) and the Monetary Authority of Singapore (MAS) have announced a project to link their respective fast payment systems – Unified Payments Interface (UPI) and PayNow. RBI said in a statement today that the linkage is targeted for operationalisation by July 2022.
RBI said that 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 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,” RBI said.
“The linkage builds upon the earlier efforts of NPCI International Private Limited (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 further anchor trade, travel and remittance flows between the two countries,” it added.
UPI-PayNow Linking Benefit
The linking of UPI and PayNow will not only lead to an increase in trade between India and Singapore but also help investors save a lot of money that they currently have to pay as inter-bank transactions that are above the LRS processing fees by banks.
“This is a very positive and encouraging announcement. The reduction in time & charges for cross-border payments will help grow trade between India & Singapore. From an investing perspective, this will incentivize more retail investors to access global markets. Currently, they pay upto Rs.3000 in inter-bank charges which are over & above the LRS processing fees by banks. This eats into their returns and hence discourages small investors from accessing global markets. The project is a welcome initiative and we look forward to its final rollout,” Asheesh Chanda, Founder and CEO of Kristal.AI, said.
UPI-PayNow linkage is in line with RBI’s vision of reviewing corridors and charges for inbound cross-border remittances outlined in the Payment Systems Vision Document 2019-21.
UPI and PayNow features
UPI is India’s mobile based, ‘fast payment’ system that facilitates customers to make round the clock payments instantly using a Virtual Payment Address (VPA) created by the customer, eliminating the risk of sharing bank account details by the remitter.
UPI supports both Person to Person (P2P) and Person to Merchant (P2M) payments as also it enables a user to send or receive money.
Whereas PayNow is the fast payment system of Singapore which enables peer-to-peer funds transfer. It is available to retail customers through participating banks and Non-Bank Financial Institutions (NFIs) in Singapore.
PayNow 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, Singapore NRIC/FIN, or VPA.