'Cheaper, faster, safer': India, Singapore launch real-time payments link

In the first such collaboration for India, the country’s flagship payments platform, the Unified Payments Interface (UPI), and Singapore’s PayNow payment system have launched a real-time cross-border payment linkage system.

The linkage, which was launched by Prime Minister (PM) Narendra Modi and Singapore’s PM Lee Hsien Loong on Tuesday, was kicked off by a live cross-border transaction between Reserve Bank of India Governor Shaktikanta Das and Monetary Authority of Singapore managing director Ravi Menon, using mobile phones.

The linkage will enable users to transfer funds held in bank accounts or e-wallets to and from India using only the UPI ID, mobile number, or Virtual Payment Address (VPA), the RBI said.

Initially, Indian users can remit up to Rs 60,000 (approximately 1,000 Singapore dollars) a day.

“From today onwards, the people of Singapore and India will be able to transfer money across the border using their mobile phones in just the same way they have been doing in their respective countries.

"This facility will provide a low-cost and real-time option for cross-border remittances between our two countries.

"The people who will especially benefit from this are migrant workers, professionals, students, and their families,” Modi said via videoconference.

“The UPI is the most preferred payment mechanism in India.

"That is why today, many experts are estimating that very soon India’s digital wallet transactions are going to overtake cash transactions,” he said.

More than 400,000 Indians reside in Singapore and the annual cross-border retail payments and remittances between the two countries amount to over $1 billion, Loong said.

Apart from marking India’s maiden cross-border real-time, person-to-person payments linkage, the partnership between the UPI and PayNow marks the world’s first to feature cloud-based infrastructure and participation by non-bank financial institutions.

The RBI, the Monetary Authority of Singapore, the NPCI International Payments Ltd, Banking Computer Services Pte Ltd, participating banks as well as non-bank financial institutions worked together to create the linkage.

In 2018, Singapore’s Network for Electronic Transfers worked with NPCI International Payments Ltd to allow card and QR code payments between the two countries.

“The idea of linking PayNow and the UPI was first conceived in 2018 when PM Modi visited Singapore.

"The PayNow-UPI linkage will offer cheaper, faster, and safer cross-border retail payments and remittances for businesses and individuals alike directly between bank accounts or e-wallets,” Loong said.

In recent public appearances Das expressed optimism about firm growth in remittances this financial year, saying that the estimated flows would help bridge India’s current account deficit.

The World Bank projects remittances of $100 billion for India in the current year.

The latest RBI data showed that in July-September, private transfer receipts amounted to $27.4 billion, 29.7 per cent higher year-on-year.

Private transfer receipts primarily represent remittances by Indians employed overseas.

To begin with, State Bank of India, Indian Overseas Bank, Indian Bank, and ICICI Bank will facilitate the remittances -- both inward and outward -- while Axis Bank and DBS India will facilitate the inward remittances.

Users in Singapore can avail of the service through DBS-Singapore and Liquid Group, which is a non-bank financial institution.

Over time, more banks will be roped in for the linkage, the RBI said.

“With India being one of DBS’ biggest markets for overseas remittances, this is a welcome addition to our wide-ranging suite of payment solutions for small and medium enterprises, retail customers, and especially migrant workers, who now have another convenient option to send money to their loved ones back home,” said Shee Tse Koon, Singapore country head, DBS Bank.

In 2022, the UPI processed over 74 billion transactions, worth Rs 125.94 trillion, the NPCI (National Payments Corporation of India) data showed.

The platform had processed over 38 billion transactions worth Rs 71.54 trillion in 2021.

The platform had crossed the first billion transactions in October 2019, almost three years after its launch in 2016.