Prime Minister Narendra Modi and Singapore PM Lee Hsien Loong on Tuesday virtually launched a real-time payments link between the Unified Payments Interface (UPI) of India and PayNow of Singapore.
Reserve Bank of India governor Shaktikanta Das and Monetary Authority of Singapore managing director Ravi Menon made live cross-border transactions to each other using their respective mobile phones.
Singapore is the first country with which a cross border person-to-person (P2P) payment facility has been launched.
The UPI-PayNow linkage will enable all users of the two payment systems in either country to make convenient, safe, instant, and cost-effective cross-border money transfers using their mobile apps, the RBI says.
Funds held in bank accounts or e-wallets can be transferred to and from India using just the UPI-id, mobile number, or Virtual Payment Address (VPA), according to the RBI.
"To begin with, State Bank of India, Indian Overseas Bank, Indian Bank and ICICI Bank will facilitate both inward and outward remittances while Axis Bank and DBS India will facilitate inward remittances. For Singapore users, the service will be made available through DBS-Singapore and Liquid Group (a non-bank financial institution). More number of banks will be included in the linkage over time," India's central bank said.
Customers of the participating banks can undertake cross-border remittances to Singapore using the bank's mobile banking app or internet banking. An Indian user can remit up to ₹60,000 in a day. At the time of making the transaction, the system will display the amount in both currencies for the convenience of the user.
This, according to the government, will help the Indian diaspora in Singapore, especially migrant workers and students and bring the benefits of digitalisation and fintech to the common man through instantaneous and low-cost transfer of money from Singapore to India and vice-versa.
"The UPI-PayNow linkage is the product of extensive collaboration between Reserve Bank of India (RBI), Monetary Authority of Singapore (MAS), and Payment System Operators of both countries viz. NPCI International Payments Limited (NIPL) and Banking Computer Services Pte Ltd. (BCS), and participating banks / non-bank financial institution," the RBI says.
This interlinkage aligns with the G20's financial inclusion priorities of driving faster, cheaper and more transparent cross-border payments and will be a significant milestone in the development of infrastructure for cross-border payments between India and Singapore, it adds.
The linking comes at a time when UPI payments through QR codes are already available at selected merchant outlets in Singapore. Earlier this month, PhonePe became the first fintech app to launch 'UPI international' payments. The Walmart-owned digital payments firm supports international merchant outlets in the U.A.E., Singapore, Nepal and Bhutan that have a local QR code. As per the company, users can now make payments in the foreign currency directly from their Indian bank, just like they do with international debit cards.
Finance Minister Nirmala Sitharaman had last year said that India is talking to different countries, including Singapore and the U.A.E., to make RuPay, UPI and BHIM acceptable in their countries.