India and Singapore will link their respective fast payment systems -- Unified Payments Interface (UPI) and PayNow so as to enable users to make instant, low-cost fund transfers on a reciprocal basis, the Reserve Bank said on Tuesday.
The Reserve Bank of India (RBI) and the Monetary Authority of Singapore (MAS) announced the project to link the fast payment systems. The linkage is targeted for operationalisation by July 2022, the RBI said in a statement.
"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," it said
The latest project is in line with the Reserve Bank of India’s plan of reviewing the corridors and the charges for the inbound cross-border remittances that have been drafted in the Payment Systems Vision Document 2019-2021.
The initiative by India and Singapore closely aligns with the G20’s financial inclusion priorities of driving cheaper, faster, and more transparent cross-border payments.
The linkage between the two countries has been built upon the earlier efforts of NPCI International Private Ltd and the Network for Electronic Transfers to develop the cross-border interoperability of payments with the use of cards and QR codes between India and Singapore.
Unified Payment Interface (UPI) is a mobile-based, fast payment system in India. It facilitates the customers to make round-the-clock payments instantly with the use of a Virtual Payment Address (VPA) that has been created by the user. UPI eliminates the risk of sharing bank details by the remitter. It supports both Person to Person (P2P) and Person to Merchant (P2M) payments as the system also enables the user to send or receive the money.
Whereas PayNow is the fast payment system of Singapore. It enables peer-to-peer funds transfer service that has been available to the retail customers in the country through the participating banks and Non-Bank Financial Institutions (NFIs) in Singapore. PayNow in Singapore enables the users to send and receive instant funds from one bank to another in the country by using just their mobile number, VPA, or Singapore NRIC/FIN.
Image source: Indianstartup News