“Singapore wants to connect its PayNow with UPI and that project will finish sometime in the next few months when that happens anybody sitting in Singapore will be able to send money to their family members in India.”
— P Kumaran, India’s High Commissioner in Singapore
PRAVASISAMWAD.COM
India and Singapore have completed technical preparations to link their fast payment systems UPI and PayNow to enable fund transfers between the two countries instantaneously and at low cost, a move which is aimed at benefitting migrant workers.
The Reserve Bank of India (RBI) and Singapore’s central bank, the Monetary Authority of Singapore (MAS), have been working on linking the United Payments Interface (UPI) and PayNow, a project that is expected to roll out very soon. “Singapore wants to connect its PayNow with UPI and that project will finish sometime in the next few months when that happens anybody sitting in Singapore will be able to send money to their family members in India,” India’s High Commissioner in Singapore P Kumaran said.
Prime Minister Narendra Modi is likely to announce the project once it is formalized, the envoy said.
“For us, the practical implications sitting here is that any worker who wants to send small amounts can do so at a fraction of the money they are being charged by the standard money transfer companies. So it is going to be a big benefit to those who instead of sending money in one go can do so in small pieces and it will still cost less,” the Indian envoy to Singapore said.
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Asean comprises 10 member countries- Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam
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The Asean has become the fifth-largest economic community in the world
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A linkage such as the UPI-PayNow could become a model for setting up an infrastructure for cross-border payments between India and the Asean countries
PayNow is similar to India’s homegrown card payment network RuPay. Apart from this, PayNow has linkages with other countries of Asean, which makes it easier for people to buy and sell within the region.
“PayNow also has similar initiatives with other countries in Asean so when PayNow connects this side with India and that side with Asean countries they can go from India to any Asean country through Singapore. They currently have a project with the Philippines, the Indian ambassador said.
Similarly, Malaysia and Thailand have made a connection with their fast payment systems. “Eventually we will also have added connectivity and it will reduce transaction costs of remittances,” the Indian envoy said.
Under the proposed linkage, money can be transferred from India to Singapore using mobile phone numbers and from Singapore to India using UPI virtual payment address (VPA). Approximately there are an estimated 2 lakh workers come to Singapore to work for brief periods and they often send money back home. The UPI-PayNow especially will benefit migrant workers who typically sacrifice about 10 per cent as fees charged by banks for money transfers.
Asean comprises 10 member countries- Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.
The Asean has become the fifth-largest economic community in the world. A linkage such as the UPI-PayNow could become a model for setting up an infrastructure for cross-border payments between India and the Asean countries.
Earlier in 2021, the Reserve Bank of India (RBI) and the Monetary Authority of Singapore (MAS) announced the project to link their fast payment systems targeting operationalisation by July 2022.
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