Prime Minister Narendra Modi and his Singapore counterpart Lee Hsien Loong will see the launch and linkage of cross-border connectivity between the Unified Payments Interface (UPI) of India and PayNow of Singapore on Tuesday, according to a press statement from the Prime Minister’s Office.
Reserve Bank of India (RBI) Governor Shaktikanta Das and Ravi Menon, Managing Director, Monetary Authority of Singapore (MAS), will kick off the linkage through a video conferencing at 11 am on February 21.
In September 2021, the MAS and the RBI had signed a Memorandum of Understanding (MoU) to link Singapore’s PayNow and India’s UPI real-time payment systems.
The PayNow-UPI linkage will enable users to make instant, low-cost fund transfers directly from one bank account to another between Singapore and India. When implemented, fund transfers can be made from India to Singapore using mobile phone numbers, and from Singapore to India using UPI virtual payment addresses (VPA), a Singapore press statement said.
MAS chief fintech officer Sopnendu Mohanty, on the sidelines of the G20 First Working Group’s meeting on financial inclusion in Kolkata, said that the implementation of the project will bring down the cost of sending remittances by as much as 10 percent. He also added that data-sharing regulations, cost barriers for adoption, and legal hurdles are bigger than technological challenges.
“By reducing the cost and inefficiencies of remittances between Singapore and India, the PayNow-UPI linkage will directly benefit individuals and businesses in Singapore and India that greatly rely on this mode of payment. Given that PayNow and UPI are integral components of their national digital infrastructures, the link between the two systems also paves the way for establishing more comprehensive digital connectivity and interoperability between the two countries,” Mohanty said while announcing the MoU in the press statement.
The UPI Success
India’s UPI system is steadily becoming attractive globally. The facility is seeing international extension to inbound foreign travelers from G20 countries for making merchant payments and non-resident Indians (NRIs) in selected international countries.
Union Minister Ashwini Vaishnaw on February 13 said that India has signed memoranda of understanding (MoUs) with 13 countries that want to adopt the Unified Payments Interface (UPI) for digital payments.
The global partnerships for UPI adoption have come through as the NIPL (NPCI International Payments Limited). NIPL was incorporated in April 2020 as a wholly owned subsidiary of the National Payments Corporation of India (NPCI), devoted to the deployment of RuPay and UPI outside of India.
UPI breaks record
According to the NPCI data, UPI booked a record 7.82 billion transactions totalling Rs 12.82 trillion in December 2022. Approximately 74 billion UPI transactions worth Rs 125.94 trillion were conducted in the calendar year 2022 against 38 billion transactions amounting to Rs 71.54 trillion in 2021 taking the growth of the transaction to 90 per cent average value growth to 76 percent on a yearly basis.