On Tuesday, Indian Prime Minister Narendra Modi and his Singaporean counterpart Lee Hsien Loong announced cross-border connectivity between their countries’ respective PayNow systems. By using Google Pay, Paytm, and other comparable digital payment systems, Indians would be able to send money quickly, cheaply, and around-the-clock to Singaporeans and vice versa.
What is UPI?
A speedy payment technique called UPI, or Unified Payments Interface, allows money to be transmitted instantly through a cellphone number. It was created by the National Payments Corporation of India (NPCI), which eliminates the danger of disclosing bank account information by using a Virtual Payment Address (VPA). It facilitates P2P and P2M payments between individuals and businesses.
What is PayNow?
Singapore offers a PayNow function, similar to UPI. With a cellphone number, consumers can transfer money between bank or e-wallet accounts. Participating banks and Non-Bank Financial Institutions (NFIs) throughout the nation enable this peer-to-peer payments connectivity.
How can the UPI-PayNow connection be beneficial?
Cross-border payments are typically pricey. Fund transfers utilising mobile phone numbers from India to Singapore will be possible thanks to the UPI-Pay Now integration, and vice versa using UPI virtual payment addresses. Folks in both nations will be able to send money in real-time via QR codes or just by typing in their mobile phone numbers that are connected to their bank accounts.
It will make it possible for users of two quick payment systems to transfer money right away without having to sign up for another payment system.
The project is anticipated to have a significant positive impact on the Indian diaspora, particularly migrant workers and students in Singapore, as it enables quicker and more affordable money transfers between the two nations. The project is anticipated to have a significant positive impact on the Indian diaspora, particularly migrant workers and students in Singapore, as it will enable quicker and more affordable money transfers between the two nations.
Singapore is one of India’s top four inbound remittances markets, according to the RBI Remittance Survey, 2021.
According to the RBI, the connectivity will be a crucial turning point in the creation of Singapore’s and India’s next-generation cross-border payment infrastructure. The G20’s aims for financial inclusion, which include promoting quicker, less expensive, and more transparent cross-border payments, will also be closely aligned with this. At the G20 meeting on financial inclusion, Sopnendu Mohanty, chief fintech officer of the Singapore central bank, stated that the integration of UPI and Singapore’s PayNow with India was ready and waiting for deployment.
According to Mohanty, remittances from Singapore to India currently total at least 1 billion SGD, and from Singapore to India, they will range between 200 and 300 million SGD.
