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UPI-PayNow Integration

Context: India’s Unified Payments Interface (UPI) and Singapore’s PayNow have been recently integrated.

More on UPI-PayNow Integration News

  • UPI Integration: To enable faster remittances between India and Singapore, India’s retail payment system, UPI, and its equivalent network in Singapore, PayNow, have been integrated.
    • Singapore has now become the first country with which cross-border Person to Person (P2P) payment facilities have been launched.
  • Process: The PayNow-UPI linkage is the world’s first such linkage featuring cloud-based infrastructure and participation by non-bank financial institutions.
    • It will allow users of the two quick payment systems in either nation to send money across borders quickly, securely, and affordably via their respective mobile apps.
    • It is possible to send or receive money from India using only a UPI-id, cellphone number, or Virtual Payment Address for money held in bank accounts or e-wallets (VPA).
    • Additional information such as bank account number, IFSC code are not required.
  • Benefits: This linkage will allow users from both countries to access faster and more cost-efficient cross-border remittances.
  • Eligibility for Remittances: Currently, participating banks in India for receiving remittances through the UPI-PayNow interlinkage are:
    • Axis Bank
    • DBS Bank India
    • ICICI Bank
    • Indian Bank
    • Indian Overseas Bank
    • State Bank of India
UPI-PayNow Integration
UPI-PayNow Integration

What are Unified Payments Interface (UPI) and PayNow?

  • UPI: UPI or Unified Payments Interface, developed by National Payments Corporation of India (NPCI), is a quick payment method that enables the instantaneous transfer of funds through a mobile phone.
    • Through the creation of a Virtual Payment Address (VPA), the risk of sharing bank account details is eliminated.
    • The real-time system supports both Person-to-Person (P2P) and Person-to-Merchant (P2M) payments.
  • PayNow: It is a fast payment system in Singapore.
    • It enables peer-to-peer funds transfer service, available to retail customers through participating banks and Non-Bank Financial Institutions (NFIs) in Singapore.
    • It allows users to send and receive instant funds from one bank or e-wallet account to another in Singapore by using just their mobile number, Singapore National Registration Identity Card (NRIC)/Foreign Identification Number (FIN), or VPA.
Unified Payments Interface
Unified Payments Interface

Advantages of this Linkage

  • Low- Cost Money Transfer: The UPI-PayNow Linkage will enable users of each of the two fast payment systems to make instant, safe, convenient, quick, low-cost fund transfers on a reciprocal basis without a need to get on board the other payment system.
    • This linkage will reduce the remittance cost by 10%.
    • This move will also bolster the trade and remittance flow between the two countries.
  • Facilitate Indian Diaspora: This Linkage will help the Indian diaspora in Singapore, especially migrant workers/students.
  • Interoperability: There will be interoperability of the two digital payment networks, allowing seamless remittances between the two countries at a highly competitive rate.
  • Boost Tourism and Business: This integration will also help Indian tourists pay in Singapore using UPI. It will benefit the individuals and businesses in both the countries.
  • Digital Connectivity: The link between the two systems also paves the way for establishing more comprehensive digital connectivity between the two countries.
  • Less Dependence on SWIFT: A global real-time linkage of the payment systems reduces the dependency on the SWIFT network, thereby optimizing time and resources and enhancing cross-border remittance.
  • Incentive for Innovators: This Linkage will create an enabling environment for innovators and regulators to accelerate the delivery of effective digital payments solutions.

How will India Benefit?

  • Financial Inclusion: This is a testimony to India’s growth as the digital payments superpower, further it fosters an ecosystem for financial inclusion and digital India goals.
  • Aid India’s FinTech Growth: RBI’s partnership with the Monetary Authority of Singapore (MAS) brings together extensive resources which will aid India’s FinTech growth.
  • India and ASEAN: This will also establish a significant foundation for cross-border payments between India and ASEAN countries, creating a favorable environment for digital payments beyond borders.

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Which country integrated with India’s Unified Payments Interface (UPI)?

India’s Unified Payments Interface (UPI) and Singapore’s PayNow have been recently integrated.

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