The Reserve Bank of India (RBI) on Tuesday stated it is working on a project with the Monetary Authority of Singapore to hyperlink the Unified Payments Interface (UPI) with the city-state’s rapid payments program PayNow. The linkage is targeted to be operational by July 2022.
The linkage will allow customers of each and every payment program to make immediate, low-expense fund transfers on a reciprocal basis without having obtaining on board the other program, the Indian central bank stated.
“The UPI-PayNow linkage is a significant milestone in the development of infrastructure for cross-border payments between India and Singapore, and closely aligns with the G20’s financial inclusion priorities of driving faster, cheaper and more transparent cross-border payments,” the RBI stated.
The linkage builds upon the earlier efforts of NPCI International (NIPL) and Network for Electronic Transfers (NETS) to foster cross-border interoperability of payments employing cards and QR codes amongst India and Singapore. The linkage will additional anchor trade, travel and remittance flows amongst the two nations, the RBI stated.
The initiative is also in line with the RBI’s vision of reviewing corridors and charges for inbound cross-border remittances outlined in the Payment Systems Vision Document 2019-21. In that document, released in May 2019, the RBI had observed that the expense of remitting funds is increasingly becoming a essential element influencing the size of remittances.
“High cost of remittance made through formal channels may drive customers to informal channels, which are less secure and prone to misuse,” it had stated in the document, adding that it would examine the function that payment services providers can play to guarantee friction-no cost remittances at reduced expense.
UPI is India’s mobile-based payment program that facilitates clients to make round-the-clock payments instantaneously and straight from their bank accounts employing a virtual payment address (VPA) developed by the client. In August, UPI clocked more than 3.5 billion transactions worth Rs 6.39 lakh crore.
PayNow is the rapid payment program of Singapore which enables peer-to-peer funds transfer service, readily available to retail clients by means of participating banks and non-bank monetary institutions in Singapore. It enables customers to send and get immediate funds from one bank or e-wallet account to an additional in Singapore by employing just their mobile quantity, Singapore NRIC/FIN or VPA. The platform has seen more than 4.9 million registrations, as on January 3, according to the Association of Banks in Singapore.