The Reserve Bank of India (RBI) and the Monetary Authority of Singapore (MAS) announce a project to link their respective fast payment systems viz. Unified Payments Interface (UPI) and PayNow. Linkage of these two fast payment systems is a significant milestone in the development of infrastructure for cross-border payments between India and Singapore and closely aligns with the G20’s financial inclusion priorities of driving faster, cheaper, and more transparent cross-border payments.
Unified Payments Interface (UPI) is a mobile-based, 365x24x7 ‘fast payment’ system. Through UPI, users can send and receive money instantly by means of a Virtual Payment Address (VPA) set by the users themselves. The unique feature of VPA-based transactions is the security aspect of UPI architecture as it removes the need for sharing an account or bank details to the remitter. UPI supports both Person to Person (P2P) and Person to Merchant (P2M) payments. Whereas, PayNow of Singapore is the fast payment system that enables peer-to-peer funds transfer service, available to retail customers through participating banks and Non-Bank Financial Institutions (NFIs) in Singapore. This fast payment system enables users to send and receive instant funds from one bank or e-wallet account to another in Singapore by using just their mobile number, Singapore NRIC/FIN, or VPA.
The UPI-PayNow linkage is targeted for operationalisation by July 2022 which will enable users of each of the two fast payment systems to make instant, low-cost fund transfers on a reciprocal basis without a need to get onboarded onto the other payment system.
The above initiative is in line with the earlier efforts of NPCI International Private Limited (NIPL) and Network for Electronic Transfers (NETS) to foster cross-border interoperability of payments using cards and QR codes, between India and Singapore and will further anchor trade, travel, and remittance flows between the two countries. The initiative is also consistent with intensive efforts and involvement of all stakeholders, the Payment Systems Vision 2021.
With its 36 specific action points and 12 specific outcomes, Payment Systems Vision 2021 aspires to (a) enhance Customer experience, including robust grievance redressal; (b) empower payment System Operators and Service Providers; (c) enable the payments Eco-system and Infrastructure; (d) put in place Forward-looking Regulations; and (e) undertake Risk-focused Supervision. The ‘no-compromise approach towards safety and security of payment systems remains a hallmark of the Vision.