In a major effort to disrupt the cross-border money flow between the two countries, which totals more than $1 billion annually, India and Singapore have linked their digital payment systems, UPI and PayNow, to enable rapid and affordable fund transactions.
Starting on Tuesday, citizens of Singapore and India will be able to send money to one another quickly via PayNow and the Unified Payments Interface (UPI). At 11 a.m. on Monday, Shaktikanta Das, governor of the Reserve Bank of India (RBI), and Ravi Menon, managing director of the Monetary Authority of Singapore, officially launched the connection of cross-border real-time payment systems. Prime Ministers Lee Hsien Loong of Singapore and Narendra Modi of India virtually attended the inaugural event.
They reported that eight banks from Singapore and India, including DBS, Liquid Group, Axis Bank, and State Bank of India, are now taking part in the collaboration. The local payment systems of each country’s citizens can be used to transmit money in “real-time” to people elsewhere.
According to the Reserve Bank of India, an Indian user can currently send up to $1,000 in Singapore dollars per day.
The two nations initially set a July 2022 timetable for the collaboration to be operational when they announced their intention to join their payment systems in 2021. “The Pay Now-UPI linkage is Singapore’s second and India’s first cross-border, real-time system linkage. The inclusion of non-bank financial organizations and cloud-based infrastructure make it the first such linkage in the world, according to Singapore Prime Minister Lee Hsien Loong, who spoke at the conference.
“The PayNow and UPI connection will develop in utility and contribute more to facilitating our trade and our people to people ties,” he continued. “We will gradually add more users and use cases.”
Indians now prefer using UPI, a seven-year-old payments system created by a group of retail banks, for their online transactions.
Almost 8 billion transactions are processed monthly by the system, which is used by numerous national and international businesses like Walmart, Google, and Facebook. Similar to UPI, Singapore’s PayNow enables interoperability between banks and payment apps in the country, enabling users of one payment app to conduct transactions with those of another app.
The declaration made on Tuesday is the most recent step in New Delhi’s continuous drive to introduce and broaden its technological infrastructure, including UPI and Digi Locker, to other countries. India intends to use its current G20 forum presidency to give presentations to other countries about its digital infrastructure.
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