India and Singapore to link their Fast Payment Systems
In a bid to boost trade and service between two nations, central banks are pursuing bilateral payment infrastructure initiatives to help their home country businesses to take advantage of global trade opportunities.
In such, India’s Reserve Bank of India and Singapore’s Monetary Authority of Singapore (MAS) have announced a project through which they will link their respective fast payments system which is Unified Payments Interface (UPI) and PayNow respectively. The linkage is targeted to be operational for July 2022.
The press note says that the UPI-PayNow linkage will enable ‘two fast payment systems to make instant, low-cost fund transfers on a reciprocal basis without a need to get onboarded onto the other payment system’. This will benefit both consumers and businesses who rely on this mode to pay to send and receive money.
This integration of two payment systems in two different countries according to press notes is a ‘significant milestone in the development of infrastructure for cross-border payments between India and Singapore’ and it is also closely aligned towards ‘G20’s financial inclusion priorities of driving faster, cheaper and more transparent cross-border payments’.
This linkage builds upon the earlier efforts of NPCI International Private Limited (NIPL) and Network for Electronic Transfers (NETS) to foster cross-border interoperability of payments using cards and QR codes and with further tight integration, it will help in trade, travel and remittance.
UPI is India’s faster payments mode which is available 24*7 and uses Virtual Payment Address (VPA) to transact between two parties while PayNow is the fast payment system in Singapore that enables peer-to-peer fund transfer available through banks and Non-Banking Financial Institutions (NFIs) in Singapore.