Fund transfer: India’s UPI ties up with Singapore’s PayNow for P2P transactions
Virendra Pandit
New Delhi: India’s hugely popular digital payments mode, the United Payments Interface (UPI), on Tuesday established interlinkage with its Singapore counterpart PayNow to facilitate direct fund transfer between two persons up to a maximum of Rs. 60,000 (or S$ 1,000) in a day.
The two countries interlinked their systems that enable real-time money transfers between their people. This payment connection is part of the current trend in Asia where people have started instantaneous, cross-border fund transfers via mobile phones, bypassing bank branches and doing away with paying higher money transfer fees.
Cross-border remittance transactions through the UPI-PayNow interlinkage can be carried out easily, the way domestic transactions through UPI in India or PayNow in Singapore take place. The transaction can be completed within a minute.
Many Asian countries are also removing barriers to facilitate a quick movement of funds. Singapore rolled out a similar connection with Thailand in 2021 and is working with Malaysia on a similar project, the media reported.
Reserve Bank of India (RBI) Governor Shaktikanta Das initiated the first transaction with the Monetary Authority of Singapore (MAS) Managing Director Ravi Menon, according to a statement from the MAS, the central bank of Singapore.
According to an RBI report, Singapore is among the top countries sending remittances to India, after the US, United Arab Emirates, and the UK. The Southeast Asian city-state accounted for almost 6 percent of India’s total inward flows of $89 billion from individuals in the fiscal year that ended in March 2022.
DBS Group Holdings Ltd. is the first participating bank from Singapore in this tie-up. A non-banking financial institution, Liquid Group, will also offer cross-border fund transfers. DBS has seen an aggressive expansion in India.
Six Indian banks—Axis Bank, DBS Bank India, ICICI Bank, Indian Bank, Indian Overseas Bank, and State Bank of India—have been chosen for receiving remittances from Singapore through the UPI-PayNow interlinkage. There are four Indian banks—ICICI Bank, Indian Bank, Indian Overseas Bank, and State Bank of India—for sending remittances through interlinkage.
Initially, only selected customers of Singapore’s largest bank will be able to use the UPI-PayNow linkage to transfer funds to a maximum of S$200 ($150) per transaction, capped at S$500 a day, according to a DBS statement. The service will be extended to all customers by March 31, and they will be able to transfer funds of as much as S$1,000 a day.
Under this cross-border payments interlinkage, only person-to-person (P2P) remittances are allowed using their respective Fast Payments Systems, the UPI and PayNow, the RBI said.
Such remittances should be for the purpose of “maintenance of relatives abroad” and “gift” under the Liberalized Remittance Scheme (LRS).
The RBI said there is an opt-in/opt-out feature in the apps of the participating banks in India for receiving remittances from Singapore.
The UPI-PayNow interlinkage might later cover more banks and financial institutions in India, the RBI added.
