Unveiling the UPI-PayNow Integration

The announcement of the integration of India's UPI and Singapore's PayNow was made in February 2023, marking a milestone in the journey that began in September 2021.

• The primary goal of this integration is to enable smooth, transparent, and swift cross-border transactions, thereby improving the efficiency of payments related to remittances, trade, and travel between India and Singapore.
• This integration leads to a “real-time payment linkage”, which means remittances between the two countries can be made instantly, and at a competitive rate.

Understanding UPI and PayNow

• UPI, or Unified Payments Interface , is a revolutionary payment system that allows for the instantaneous transfer of funds between two bank accounts via a single mobile application.
• PayNow, on the other hand, is a swift payment system that is accessible to retail customers through participating banks and Non-Bank Financial Institutions (NFIs) in Singapore.
  • It offers a peer-to-peer funds transfer service, which enables users to send and receive instant funds from an e-wallet or one bank account to another in Singapore using just their Foreign Identification Number (FIN) or Singapore National Registration Identity Card (NRIC) or mobile number.

The Impact of UPI-PayNow Integration

• Typically, cross-border retail transactions tend to be more expensive and less transparent than domestic transactions.
• As such, the UPI-PayNow integration is a significant stride towards building an efficient infrastructure for cross-border payments between Singapore and India.
• Moreover, this linkage aligns with the G20’s financial inclusion priorities, which emphasize on enhancing transparency in cross-border payments, reducing transaction costs, and speeding up payments.

How will this integration benefit the citizens of India and Singapore?

• The Indian diaspora in Singapore, including migrant workers and students, will greatly benefit from this integration as it will allow them to transfer money between Singapore and India instantly and affordably.
• The UPI-PayNow integration will permit users of each system to transfer funds instantly and at a low cost without needing to register with the other system.
• As per the RBI Remittance Survey 2021, Singapore contributed to 5.7% of the total inward remittances to India in 2020-21. This integration is expected to boost these figures further.