India’s UPI and Singapore’s PayNow have been officially integrated. The UPI-PayNow linkage is a huge development which will pave the way for seamless cross-border transactions between the two countries. In this article, you can learn all about this development from the perspective of the UPSC exam. Also, watch the video below to fully understand the topic.
UPI PayNow Linkage
The official integration of India’s UPI and Singapore’s PayNow was announced in February 2023, following the project’s initiation in September 2021.
- The integration aims to facilitate transparent cross-border transactions, and efficient and faster payments relating to remittances, trade and travel between the two countries.
- The integration allows for a “real-time payment linkage”, enabling faster remittances between the two countries at a competitive rate.
What are UPI and PayNow?
- UPI, or Unified Payments Interface, is a real-time payment system that enables the instant and quick transfer of funds between two bank accounts through a single mobile application.
- PayNow is a fast payment system accessible to retail customers through participating banks and Non-Bank Financial Institutions (NFIs) in Singapore.
- It enables peer-to-peer funds transfer service, allowing users to receive and send instant funds from an e-wallet or one bank account to another in Singapore using just their Foreign Identification Number (FIN) or Singapore National Registration Identity Card (NRIC) or mobile number.
India, Singapore launch UPI-PayNow link – Significance
- Cross-border retail transactions are typically more expensive and less transparent than domestic transactions.
- Therefore, the integration of UPI and PayNow is an important step in establishing infrastructure for cross-border payments between Singapore and India.
- This linkage is also strongly associated with the G20’s financial inclusion priorities, which aim to promote more transparent cross-border payments, cheaper transactions and faster payments.
How will it benefit the citizens of both countries?
- The linkage will benefit the Indian diaspora in Singapore, particularly migrant workers and students, by enabling them to transfer money between Singapore and India instantly and at a low cost.
- The integration of UPI and PayNow will allow users of each payment system to instantly and affordably transfer funds on a reciprocal basis without requiring registration with the other payment system.
- According to the RBI Remittance Survey 2021, Singapore accounted for 5.7% of the total inward remittances to India in 2020-21.
UPI-PayNow Linkage:- Download PDF Here
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