Prime Minister Narendra Modi and his Singaporean counterpart Lee Hsien Loong will witness the launch and cross-border connectivity between India's Unified Payments Interface (UPI) and Singapore's PayNow on Tuesday, according to a press release from the Prime Minister's Office.
Reserve Bank of India (RBI) Governor Shaktikanta Das and Ravi Menon, CEO of the Monetary Authority of Singapore (MAS), will initiate the link via video conference at 11am on February 21.
In September 2021, MAS and RBI signed a Memorandum of Understanding (MoU) to connect Singapore's PayNow and India's UPI payment systems in real time.
Linking PayNow-UPI will allow users to make instant and low-cost money transfers directly from one bank account to another between Singapore and India. When implemented, money transfers can be made from India to Singapore using mobile phone numbers, and from Singapore to India using UPI Virtual Payment Addresses (VPAs), according to a Singapore press release.
The implementation of the project will reduce the cost of sending remittances by up to 10 percent, MAS Director of Financial Technology Subnendo Mohanty said on the sidelines of the first meeting of the G20 Task Force on financial inclusion in Kolkata. He also added that data sharing regulations, cost barriers to adoption, and legal hurdles outweigh the technological challenges.
"By reducing the cost and inefficiencies of remittances between Singapore and India, the PayNow-UPI link will directly benefit individuals and businesses in Singapore and India who rely heavily on this payment method. With PayNow and UPI as key components of their national digital infrastructure, The link between the two systems also paves the way for the creation of a more complete and interoperable digital connection between the two countries.
The UPI Success
The Indian UPI system is becoming more and more attractive globally. The facility is undergoing an international expansion for foreign travelers from G20 countries to make payments to merchants and Non-Resident Indians (NRIs) in selected international countries.
Union Minister Ashwini Vaishnaw said on February 13 that India has signed MoUs with 13 countries that want to adopt the Unified Payments Interface (UPI) for digital payments.
UPI Accreditation Global Partnerships has emerged as NIPL (NPCI International Payments Limited). NIPL was incorporated in April 2020 as a wholly owned subsidiary of the National Payments Corporation of India (NPCI), dedicated to spreading RuPay and UPI outside of India.
UPI breaks the record
According to NPCI data, UPI recorded a record 7.82 billion transactions totaling Rs 12.82 trillion in December 2022. Nearly 74 billion UPI transactions worth Rs 125.94 trillion were made in calendar year 2022 vs. 38 billion transactions worth Rs 71.54 trillion in 2021 with 90 percent growth in deals brought average value growth to 76 percent year-over-year.
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