The Reserve Bank of India (RBI) and the Monetary Authority of Singapore (MAS) have 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.
RBI said the UPI-PayNow linkage is a milestone in the development of cross-border payments infrastructure between India and Singapore. This also closely aligns the two countries with the G20's financial inclusion priorities of driving faster, cheaper and more transparent cross-border payments.
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.
It will further anchor trade, travel and remittance flows between the two countries.
This initiative is also advances the RBI's vision of reviewing corridors and charges for inbound cross-border remittances outlined in the Payment Systems Vision Document 2019-21.
UPI is a mobile-based fast payment system that facilitates customers to make instant payments using a Virtual Payment Address (VPA) created by the customer.
This eliminates the risk of sharing bank account details by the remitter. UPI supports both Person-to-Person (P2P) and Person-to-Merchant (P2M) payments and enables a user to send or receive money.
PayNow is the fast payment system of Singapore that enables peer-to-peer funds transfer service. This service is available to retail customers through participating banks and Non-Bank Financial Institutions (NFIs) in Singapore.
It 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
(With PTI Inputs)