The Monetary Authority of Singapore (MAS) and the Reserve Bank of India (RBI) have linked Singapore’s e-payment service PayNow with India’s Unified Payments Interface (UPI).
This will enable customers of participating financial institutions in Singapore and India to send and receive funds between bank accounts or e-wallets across the two countries in real-time.
They would be able to do this using a mobile phone number, UPI identity (in India), or Virtual Payment Address (VPA).
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.
It is also the first linkage to feature a non-bank financial institution as a participant.
The service will be made 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.
Indian customers of all participating Indian banks will be able to receive funds through the service from the onset. Sending of funds is limited to customers of four Indian banks at the time of launch, with this scope to be gradually expanded. The Indian banks are: ICICI Bank, Indian Bank, Indian Overseas Bank and State Bank of India.
The launch, on Tuesday, was officiated by Prime Minister of Singapore, Lee Hsien Loong, and the Prime Minister of India, Narendra Modi.
MAS Managing Director Ravi Menon and RBI Governor Shaktikanta Das executed live cross-border fund transfers to each other from their respective locations in Singapore and India.
PM Lee noted that cross-border retail payments and remittances between Singapore and India amount to over US$1 billion (S$1.3 billion) annually.
“Over the years, we have progressively enhanced our cross-border payment connectivity”, he added.
In 2018, Singapore’s NETS worked with India’s NPCI International Payments Limited to allow card and QR code payments between the countries.
“Today, we are taking retail payments connectivity another step forward,” the Prime Minister said.
MAS said in a statement that participating financial institutions have committed to ensuring that the service is cost-efficient and accessible, including to foreign workers and students residing in Singapore and India, “enabling them to make and receive low-cost cross border remittances back to and from their home countries”.
The linkage also provides for automatic incorporation of capital control rules in India 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.