Singapore and India are working to link their country's respective real-time payment system, enabling funds to be transferred via mobile numbers and virtual payment addresses. The move aims to support growing remittance traffic and drive cross-border interoperability.
Work to connect Singapore's PayNow and India's Unified Payments Interface (UPI) infrastructures were targeted for completion by July 2022, according to a statement released Tuesday by the Monetary Authority of Singapore (MAS). It added that the initiative was established in partnership with the Reserve Bank of India.
The linkage would enable residents in both countries to make real-time, low-cost fund transfers directly between their respective local bank account.
Funds from India could be transferred to Singapore via mobile numbers, while funds from Singapore could be transferred to India using UPI virtual payment addresses. These addresses are used by non-bank financial institutions to connect directly to PayNow and Fast and Secure Transfers (FAST), and enable users to send and receive payments through e-wallets or mobile banking apps.
User experience will be similar to how each payment system operates in its domestic market, MAS said.
The Singapore central bank added that the interoperability between PayNow and UPI would better facilitate growing remittance traffic and allow more organisations to join the payment ecosystem. It would also help drive automation of capital control rules and establish standardised formats to support future services between participants, it said.
Describing the partnership as a milestone in the development of next-generation cross-border payment infrastructures between both countries, MAS said such connectivity was in line with the G20's financial inclusion priorities of driving "faster, cheaper, and more transparent" cross-border payments.
MAS' chief fintech officer Sopnendu Mohanty said: "By reducing the cost and inefficiencies of remittances between Singapore and India, the PayNow-UPI linkage will directly benefit individuals and businesses in Singapore and India that greatly rely on this mode of payment.
"Given that PayNow and UPI are integral components of their respective national digital infrastructures, the link between the two systems also paves the way for establishing more comprehensive digital connectivity and interoperability between the two countries," Mohanty said.
Singapore in April 2021 inked a similar pact with Thailand to enable users in both nations to transfer funds using the recipient's mobile number. The collaboration tapped the respective country's peer-to-peer payment systems, PayNow and Thailand's PromptPay, and was part of a regional payment initiative to ease cross-border payments.
Singapore earlier this month also announced it was working with the central banks of Australia, Malaysia, and South Africa to develop and test a common platform on which to process cross-border digital payments. The initiative to pilot the use of central bank digital currencies (CBDCs) for international transactions aimed to bypass the need for intermediaries and, hence, slash the time and cost of such transactions.