India-Singapore announces to link UPI and PayNow

India and Singapore have announced the linking of the Unified Payments Interface (UPI) and PayNow, in order to enable users to make instant, low-cost fund transfers.

Highlights

• The project to link the fast payment systems of both the countries was announced by Reserve Bank of India (RBI) and Monetary Authority of Singapore (MAS).
• This linked payment interface is expected to be operationalised by July 2022.
• Linked interface will help in making instant, low-cost fund transfers on a reciprocal basis without onboarding onto the other payment system.

Significance of the linking

The linkage will be a significant milestone for the development of infrastructure for cross-border payments between both the countries. It will also align with the G20’s financial inclusion priorities to provide for faster, cheaper and more transparent cross-border payments.

About UPI

It is a mobile-based fast payment system, facilitating the customers to make round the clock payments instantly by using a Virtual Payment Address (VPA). VPA is created by the customer. This system eliminates the risk of sharing bank account details by remitter. This mechanism supports Person-to-Person (P2P) as well as Person-to-Merchant (P2M) payments and enables users to send or receive money.

About PayNow

It is the fast payment system of Singapore, enabling peer-to-peer funds transfer service. It is available for retail customers with the help of participating banks & Non-Bank Financial Institutions (NFIs) in Singapore. It provides the users to send and receive instant funds from one bank or e-wallet account to another by using their mobile number, Singapore NRIC/FIN, or VPA.

Month: Current Affairs - September, 2021