SINGAPORE - People and businesses will be able to make instant, low-cost fund transfers across Singapore and India when the countries' two real-time payment systems are linked by July 2022.
The Monetary Authority of Singapore (MAS) and the Reserve Bank of India on Tuesday (Sept 14) announced plans to link Singapore's PayNow system - which lets individuals transfer money using just a mobile number - with India's Unified Payments Interface (UPI) real-time payment system.
MAS chief fintech officer Sopnendu Mohanty said: "By reducing the cost and inefficiencies of remittances between Singapore and India, the PayNow-UPI linkage will directly benefit individuals and businesses in Singapore and India that greatly rely on this mode of payment.
"Given that PayNow and UPI are integral components of their respective national digital infrastructures, the link between the two systems also paves the way for establishing more comprehensive digital connectivity and interoperability between the two countries."
The arrangement will allow people to transfer funds from India to Singapore using mobile phone numbers, and from Singapore to India through UPI virtual payment addresses (VPAs).
Non-bank financial institutions that are connected directly to PayNow and Fast (Fast And Secure Transfers) rely on VPAs to send and receive real-time payments from other users of e-wallets or mobile banking applications of PayNow and Fast participants.
This arrangement, which started in February, allows consumers here to transfer funds from their bank accounts to mobile wallets, and between such e-wallets.
Most e-wallets previously required users to top up their funds using debit or credit cards, and did not allow transfer of funds between e-wallets.
The experience of making a PayNow transfer to a UPI virtual payment address will be similar to that of a domestic transfer to a PayNow VPA.
MAS said the connectivity between PayNow and UPI is a major milestone in the development of next-generation infrastructure for cross-border payments between Singapore and India.
Singapore's central bank added that the linkage is closely aligned with the G-20's (Group of 20) financial inclusion priorities of driving faster, cheaper and more transparent cross-border payments.
It also noted that the arrangement builds on earlier efforts by Singapore's Nets and NPCI International Payments Limited (NIPL) - the global division of the National Payments Corporation of India.
Since 2018, Nets and NIPL have enabled the use of India's Bharat Interface for Money QR to make QR payments at certain Nets merchants, through Nets' QR code.
They also allowed for cross-border interoperability between both countries' payment card schemes - Nets and RuPay - at selected merchants.
About US$900 million (S$1.2 billion) was remitted from Singapore to India in 2017, according to Statista data, and Indian tourists in Singapore spent about US$200 million between January and September 2020, excluding sightseeing, entertainment and gaming, according to official Singaporean data, Bloomberg reported.
This is not the fist time that PayNow has linked up with an overseas payment system. In April, MAS and the Bank of Thailand announced that PayNow has been linked to Thailand's PromptPay, in a world first for cross-border fast payments.
The partnership allows customers of participating banks to transfer funds of up to $1,000, or 25,000 baht (S$1,019), daily across the two countries, with their mobile phones.