India’s UPI is now one with Singapore’s PayNow. What it means for the diaspora.
In recent times if there’s one modern technology that has seen unfettered adoption in India, it is India’s real-time retail payment system Unified Payments Interface (UPI). This has allowed customers across geographies and social strata to opt for quick digital payments through multiple app-based players. In Singapore, the equivalent service that is operational is called PayNow. On February 21, 2023, both were integrated to ensure quicker remittances between the two countries at a competitive rate.
Basics first: What are UPI and PayNow
Unified Payments Interface (UPI) is India’s mobile-based fast payment system, which allows customers to make 24×7 payments to individual or retail accounts in seconds, using a Virtual Payment Address (VPA) that is also created by the customer. This has simplified payments in India in a watershed manner, by means of eliminating the risk of sharing bank account details with the remitter. UPI supports both Person-to-Person (P2P) and Person-to-Merchant (P2M) payments.
PayNow is a fast payment system in Singapore, which allows peer-to-peer funds transfer service, available to retail customers through participating banks and Non-Bank Financial Institutions (NFIs) in Singapore. It allows users to send and receive instant online funds from one bank or e-wallet account to another in Singapore by using just their mobile number, Singapore National Registration Identity Card (NRIC)/Foreign Identification Number (FIN), or VPA.
What is the UPI-Pay Now linkage?
Cross-border retail payments are typically less transparent and more expensive than domestic transactions. This integration around UPI-PayNow linkage is a watershed milestone in the development of infrastructure for cross-border payments between India and Singapore and beautifully aligns with the usual financial inclusion priorities of ensuring faster, cheaper, and more transparent cross-border payments. The project to link both the fast payment systems was initiated in September 2021 to enable speedier more efficient and transparent cross-border transactions relating to most remittances between the two countries.
How will it benefit the citizens of both countries
The UPI-PayNow integration will enable:
- Users of each of the two fast payment systems to make instant, low-cost fund transfers a without a need to get on board the other payment system
It will also help the Indian diaspora in Singapore, especially migrant workers, and students, through the instantaneous and low-cost money transfer from Singapore to India and vice-versa.