UPI-PayNow linkage will allow residents in Singapore and India to undertake faster and cost-effective digital transfers
Singapore Prime Minister Lee Hsien Loong on Tuesday said the linkage between India's Unified Payments Interface (UPI) and Singapore's PayNow will allow people in the two countries to undertake faster and cost-efficient digital transfers, and exuded hope that this "strong partnership" will continue to spawn innovative technology solutions.
Prime Minister Lee and his Indian counterpart Narendra Modi witnessed the launch of the cross-border connectivity of real-time digital payment systems via video conferencing.
"I am very happy to join you (Narendra Modi) virtually for the launch of the real-time retail payment systems linkage between Singapore's PayNow and India's UPI (Unified Payments Interface)," Lee said.
The launch was attended by Reserve Bank of India (RBI) Governor Shaktikanta Das and Monetary Authority of Singapore (MAS) managing director Ravi Menon.
Das and Menon carried out the first transaction of the cross-border system as well.
"The PayNow-UPI linkage will offer cheaper, faster, and safer cross-border retail payments and remittances, for businesses and individuals alike, directly between bank accounts or e-wallets," Singapore's Prime Minister's Office said in a statement.
The move will also help the Indian diaspora in Singapore, especially migrant workers and students, through the instantaneous and low-cost transfer of money from Singapore to India and vice-versa.
"I hope this strong partnership between Singapore and India will continue to spawn innovative technology solutions and create more cross-border opportunities for our digital economies," the PMO statement said.
Singapore is the first country with which a cross-border Person-to-Person (P2P) payment facility has been launched, Prime Minister Modi said, adding, this will help the Indian diaspora in Singapore, especially migrant workers/students and bring the benefits of digitalisation and fintech to the common man through the instantaneous and low-cost transfer of money from Singapore to India and vice-versa.
Cross-border retail payments and remittances between Singapore and India amount to over USD 1 billion annually.
Prime Minister Lee said the idea of linking PayNow and UPI was first conceived in 2018 when Prime Modi visited Singapore.
"Since then, our two central banks have been working on this in earnest. Digital connectivity was also a key topic discussed at the inaugural India-Singapore Ministerial Roundtable (ISMR), which was held in New Delhi last September. So I am very glad that the PayNow-UPI linkage has now become a reality," Lee explained.
The PayNow-UPI linkage is the world's first real-time payment systems linkage to use a scalable cloud-based infrastructure which can accommodate future increases in the volume of remittance traffic, according to a MAS release.
"As we progressively add more users and use cases, the PayNow-UPI linkage will grow in utility, and contribute more to facilitating our trade and our people-to-people links," the PMO statement said.
The service is available to Singapore customers of DBS Bank and Liquid group under a phased approach, where these institutions will progressively increase the number of eligible user groups and transaction limits from Tuesday till the end of March 2023.
Indian customers of all participating Indian banks will be able to receive funds through the service from the onset, the MAS release said.
The Singapore banks, waiving transaction fees, will be tapping some 400,000 Indian migrant workers in Singapore who send their earnings back home to support families, the release added.
"My warmest congratulations to MAS and RBI, as well as the many different stake-holders the payment system operators, the payment scheme owners, bankers' associations, the financial institutions from both countries who have helped realise the PayNow-UPI linkage," Lee added.
Prime Minister Modi after the launch said about 74 billion transactions amounting to more than Rs 126 trillion, which is approximately 2 trillion Singapore dollars, were done through UPI in 2022.