India and Singapore links UPI-PayNow for real-time cross-border payments
- MAS and RBI launched the linkage between PayNow and Unified Payments Interface to enable real-time cross-border payments between both nations.
- The linkage is the world’s first real-time payment systems linkage to use a scalable cloud-based infrastructure to accommodate spikes in volume of remittance traffic.
- PayNow-UPI is also the first linkage to feature a non-bank financial institution as a participant.
Collaborations on real-time cross-border payments among countries are gathering pace, and the proliferation of faster payment infrastructures and instantaneous capabilities is evolving to become more sophisticated. In Asia alone, an increasing number of countries have entered the real-time payments space, with more countries collaborating within the region, particularly in the last couple of years.
Recently, the Monetary Authority of Singapore (MAS) and the Reserve Bank of India (RBI) forged the link between Singapore’s PayNow and India’s Unified Payments Interface (UPI) for the first time. The collaboration will enable customers of participating financial institutions in both countries to send and receive funds between bank accounts or e-wallets across the two countries in real-time.
“They can do this using just the mobile phone number, UPI identity, or Virtual Payment Address (VPA). The linkage provides customers with a safe, simple, and cost-effective way to make cross-border fund transfers,” MAS said in a statement. The PayNow-UPI linkage is also the world’s first real-time payment systems linkage to use a scalable cloud-based infrastructure that can accommodate future increases in the volume of remittance traffic.
The PayNow-UPI real-time cross-border payments linkage is the result of extensive collaboration between MAS, RBI, payment system operators in both countries, payment scheme owners, and participating banks and non-bank financial institutions. “It is a major milestone in enhancing the infrastructure for cross-border payments and supports India’s G20 Presidency priorities to improve the cost, speed, access, and transparency of cross-border payments,” MAS said.
The enabling of real-time cross-border payments between both countries is also the first to feature a non-bank financial institution as a participant. According to MAS, the service will be made available to Singapore customers of DBS Bank and Liquid Group under a phased approach. “These institutions will progressively increase the number of eligible user groups and transaction limits from today till end-March 2023,” the central bank said.
As India’s 1st first cross-border real-time payment partner, this milestone initiative reflects the deep trust between both countries, and will take bilat rlns to even greater heights. We look forward to continue to be part of India’s digital transformation journey. – HC Wong pic.twitter.com/DOzThxIr6S
— Singapore in India (@SGinIndia) February 21, 2023
Indian customers of all participating Indian banks will be able to receive funds through the service from the outset. “Sending of funds is limited to customers of four Indian banks at the time of launch, with this scope to be gradually expanded,” RBI said. Both central banks noted that participating financial institutions have committed to ensuring the service is cost-efficient and accessible.
That includes foreign workers and students residing in Singapore and India, enabling them to make and receive low-cost cross-border remittances from their home countries. “The linkage also provides for automatic incorporation of capital control rules for enhanced efficiency. MAS and RBI will review and progressively scale the linkage by increasing the number of participating financial institutions, as well as applicable use cases,” MAS said.
On the launch of the cross-border linkage between India and Singapore, Cashfree Payments’s CEO & Co-Founder, Akash Sinha, believes the move will bolster the trade and remittance flow between the two countries. “It will significantly benefit migrant workers, tourists, small businesses, and enterprises,” he said.
Akash also believes the linkage will establish a significant foundation for cross-border payments between India and ASEAN countries, creating a favorable environment for digital payments beyond borders. “In the grand scheme, this creates an enabling environment for innovators and regulators to accelerate the delivery of effective digital payments solutions. It also provides a secure and conducive environment for consumers to adopt fintech solutions,” he concluded.
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