Prime Minister Narendra Modi and his Singapore counterpart Lee Hsien Loong are set to launch and linkage of cross-border connectivity between the Unified Payments Interface (UPI) of India and PayNow of Singapore on Tuesday, according to a press statement from the Prime Minister’s Office.

Earlier in September 2021, the Monetary Authority of Singapore (MAS) and the Reserve Bank of India (RBI) signed a Memorandum of Understanding (MoU) to link Singapore’s PayNow and India’s UPI real-time payment systems.

The PayNow-UPI linkage will enable users to make instant, low-cost fund transfers directly from one bank account to another between Singapore and India. When implemented, fund transfers can be made from India to Singapore using mobile phone numbers, and from Singapore to India using UPI virtual payment addresses (VPA), a Singapore press statement said.

MAS chief fintech officer Sopnendu Mohanty, on the sidelines of the G20 First Working Group’s meeting on financial inclusion in Kolkata, said that the implementation of the project will bring down the cost of sending remittances by as much as 10 percent.

He also added that data-sharing regulations, cost barriers for adoption, and legal hurdles are bigger than technological challenges.

“By reducing the cost and inefficiencies of remittances between Singapore and India, the PayNow-UPI linkage will directly benefit individuals and businesses in Singapore and India that greatly rely on this mode of payment. Given that PayNow and UPI are integral components of their national digital infrastructures, the link between the two systems also paves the way for establishing more comprehensive digital connectivity and interoperability between the two countries,” Mohanty said while announcing the MoU in the press statement.

India’s UPI system is steadily becoming attractive globally. The facility is seeing international extension to inbound foreign travelers from G20 countries for making merchant payments and non-resident Indians (NRIs) in selected international countries, Money Control reported.

Union Minister Ashwini Vaishnaw on February 13 said that India has signed memoranda of understanding (MoUs) with 13 countries that want to adopt the Unified Payments Interface (UPI) for digital payments. 

Image courtesy: Representative image/ The Tribune