Residents in Singapore and India will now be able to send and receive funds between their bank accounts and e-wallets across the two countries in real time.
On Feb 21, the Monetary Authority of Singapore (MAS) and the Reserve Bank of India (RBI) launched the linkage between Singapore’s PayNow and India’s Unified Payments Interface (UPI).
The launch was officiated by Singapore’s prime minister Lee Hsien Loong and India’s prime minister, Narendra Modi.
Now, Singaporeans and Indians can make monetary transfers using their mobile phone number, UPI identity or virtual payment address (VPA).
The participants on Singapore’s end are DBS Group Holdings and Liquid Group. In India, Axis Bank, DBS India, ICICI Bank, Indian Bank, Indian Overseas Bank and State Bank of India are the participants.
Liquid Group, a fintech company specialising in digital payments, is the first non-bank financial institution to participate in Singapore’s cross-border real-time payment system linkage via its LiquidPay e-wallet.
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The PayNow-UPI linkage is also the world’s first real-time payment systems linkage to use a scalable cloud-based infrastructure which can accommodate future increases in the volume of remittance traffic.
The service will be made available to the Singapore customers of DBS Bank and Liquid Group under a phased approach. The institutions will then progressively increase the number of eligible user groups and transaction limits from today till the end of March.
Meanwhile, Indian customers of all participating Indian banks will be able to receive funds through the service from the onset. Sending of funds is limited to customers of ICICI Bank, Indian Bank, Indian Overseas Bank and State Bank of India at the time of launch, with this scope to be gradually expanded.
At the launch event, MAS’s managing director Ravi Menon and RBI governor Shaktikanta Das executed live cross-border fund transfers to each other from their respective locations in Singapore and India. The transaction was completed in less than a minute, outperforming MAS and RBI's conservative estimate of up to five minutes to complete each payment.
According to Lee, the idea of linking PayNow and UPI was first conceived in 2018 during his counterpart Modi’s visit to Singapore. Following the inception of the idea, the two central banks began working on the linkage in “earnest”.
"Cross-border retail payments and remittances between Singapore and India amount to over US$1 billion annually. Over the years, we have progressively enhanced our cross-border payment connectivity," says Lee.
The PayNow-UPI linkage builds upon earlier efforts by Singapore's NETS and India's NPCI International Payments Limited (NIPL) to foster cross-border interoperability of card and QR code payments. This linkage is expected to take retail connectivity another step forward, and will anchor trade, travel and remittance flows between both countries, while also supporting India's G20 presidency priorities to drive faster, cheaper and more transparent cross border payments.
Modi says this linkage is a "gift" that the citizens of India and Singapore have been "eagerly" awaiting, and will provide low-cost and real-time options for cross-border remittances between India and Singapore, benefitting migrant workers, professionals, students and their families.
The participating financial institutions are committed to ensuring that the linkage is safe, cost-effective and accessible, while also providing for automatic incorporation of capital control rules for enhanced efficiency. MAS and RBI will review and progressively scale the linkage by increasing the number of participating financial institutions, as well as applicable use cases.
“We are pleased to be part of this momentous partnership between Singapore and India to launch the new PayNow-UPI linkage. As the world becomes increasingly globalised and interconnected, we believe in collectively harnessing technology to expand access to fast and seamless cross-border payment services," says Shee Tse Koon, Singapore country head of DBS Bank.
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"With India being one of DBS’s biggest markets for overseas remittances, this is a particularly welcome addition to our wide-ranging suite of payment solutions for small- and medium-sized enterprises (SMEs), retail customers and especially migrant workers, who now have another convenient option to send money to their loved ones back home," Shee adds.
Currently, DBS and POSB customers are able to make overseas payments and funds transfers across more than 200 destinations via a wide range of DBS payments solutions, including its primary remittance service DBS Remit. PayNow-UPI will target smaller payments that can benefit from the convenience and expediency of the service.
Plans for the PayNow-UPI linkage were first announced in September 2021, with an expected launch period in the second half of 2022. Later that month, MAS announced another bilateral linkage between PayNow and Malaysia's DuitNow, with the expected launch period of 4Q2022.
Singapore's first bilateral linkage with Thailand's PromptPay service — the world's first linkage of real-time payment systems — was launched in April 2021.
In July 2021, the Bank for International Settlements (BIS) Innovation Hub and MAS published a proposed blueprint for enhancing global payments network connectivity via multilateral linkages of countries’ national retail payment systems called Project Nexus.
Over the past few years, MAS has kickstarted several collaborative fintech projects. These projects involve the areas of remittance, atomic settlement and programmable money, among others.
