India and Singapore link UPI and PayNow in cross-border payments • InNewCL
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India and Singapore have linked their UPI and PayNow digital payments systems to enable instant and low-cost money transfers to disrupt cross-border transactions between the two nations, which total over $1 billion each year.
The link between the two systems went live Tuesday, the two nations’ central banks said at a news conference. Eight banks including DBS, Liquid Group, Axis Bank and State Bank of India from Singapore and India are currently participating in the collaboration, they said. Citizens of any nation can use their local payment systems to send money in “real time” to those in the foreign country.
Currently, an Indian user can transfer up to 1,000 Singapore dollars per day, the Reserve Bank of India said.
The two nations announced their plan to link their payment systems in 2021 and had originally set a deadline of July 2022 for the collaboration to go live. “The PayNow UPI connection is India’s first real-time cross-border system connection and Singapore’s second. It is also the world’s first such connectivity feature with cloud-based infrastructure and involvement of non-bank financial institutions,” Singapore Prime Minister Lee Hsien Loong said at the conference.
“As we gradually add more users and use cases, the PayNow and UPI linkage will become more useful and do more to facilitate our commerce and people-to-people links,” he added.
UPI, a seven-year-old payment infrastructure developed by a coalition of retail banks, has become the most popular way Indians conduct online transactions.
The system, which is being adopted by numerous local and global companies including Walmart, Google and Facebook, processes over 8 billion transactions per month. Like UPI, Singapore-based PayNow offers interoperability between banks and payment apps in the country, allowing users from one payment app to transact with those of other apps.
According to Citi, nearly 250 million people around the world send more than $500 billion worth of cross-border remittances annually. But the space is ripe for disruption. “The fees are extremely high. It is embarrassing that we have not yet resolved this issue,” wrote Citi analysts. The global average cost of sending money is around 6.5%.
Tuesday’s announcement is the latest in New Delhi’s ongoing effort to bring and expand its tech infrastructure, such as UPI and DigiLocker, to other countries. India plans to use its current G20 Forum presidency to give presentations to other nations on its digital infrastructure.
