Singapore links up with India to ease cross-border funds transfers
Residents of Singapore and India now can transfer funds via their mobile numbers and virtual payment addresses, following the linkage of both countries' real-time payment systems.
The line between Singapore's PayNow and India's Unified Payments Interface (UPI) enables customers of participating financial institutions in the two Asian markets to send and receive funds between bank accounts or e-wallets, in real-time. Transfers from India to Singapore can be made using mobile numbers or virtual payment addresses, while funds from Singapore can be transferred to India using the recipient's registered UPI identity. The mobile numbers, virtual payment addresses, and UPI identities are uniquely associated with the individual's bank account.
Plans to establish the cross-border payment connectivity were first announced in September 2021 and originally targeted for completion by July last year.
Now that it is formally launched, the PayNow-UPI linkage marks Singapore's second such tieup, after Thailand. Similar plans are in the works for Malaysia, which DuitNow real-time payment system will be linked up with PayNow.
The sync up with India also marks the first time real-time payments systems are linked on a cloud-based infrastructure, said Singapore Prime Minister Lee Hsien Loong, who spoke virtually at the launch. This would allow for future increases in remittance traffic, according to Monetary Authority of Singapore (MAS).
The tieup also is the first to include non-bank financial institutions as participants, Lee said, who noted that cross-border retail payments and remittances between the two countries clocked at more than $1 billion annually.
"As we progressively add more users and use cases, the PayNow-UPI linkage will grow in utility, and contribute more to facilitating our trade and our people-to-people links," he added.
The service currently is available only to Singapore customers of DBS Bank and Liquid Group, with availability to be rolled out and transaction limits to be increased progressively through to end-March.
In India, customers of Axis Bank, DBS India, ICICI Bank, Indian Bank, Indian Overseas Bank, and State Bank of India will be able to access the cross-border payment service. Sending of funds, though, is limited to ICICI Bank, Indian Bank, Indian Overseas Bank, and State Bank of India. More will be added to the list gradually.
Customers of Liquid Group, the first non-bank financial institution to participate in such services, will transfer and receive funds via their LiquidPay e-wallet.
Capital control rules will be automatically applied, said MAS, noting that India has such requirements for funds that are remitted overseas.
The Singapore central bank said it would work with its Indian counterpart, Reserve Bank of India, to review and "progressively scale" the linkage by adding participating financial institutions and relevant use cases.
"Participating financial institutions have committed to ensuring the service is cost-efficient and accessible, including to foreign workers and students residing in Singapore and India, enabling them to make and receive low-cost cross border remittances back to and from their home countries," MAS said.
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