SINGAPORE: Singapore's PayNow and India's Unified Payments Interface (UPI) will be linked by July 2022, allowing users to make "instant, low cost" fund transfers directly between bank accounts in the two countries.
The planned linkage of the real-time payment systems was announced by the Monetary Authority of Singapore (MAS) and the Reserve Bank of India on Tuesday (Sep 14).
With the linkage, fund transfers can be made from India to Singapore using mobile phone numbers, said MAS.
From Singapore to India, the transfers can be made using UPI virtual payment addresses. The experience will be similar to a domestic transfer to a PayNow virtual payment address, it said.
The linkage of payment systems will reduce the costs and inefficiencies of remittances between Singapore and India, benefiting people and businesses who rely on this mode of payment, said MAS chief fintech officer Sopnendu Mohanty.
"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," he added.
MAS said the linkage will make provisions for higher volumes of remittance traffic, participation by multiple entities, automation of capital control rules and "enriched message formats to accommodate future innovation by linkage participants".
These were a significant upgrade to the design of current cross-border payment systems, said MAS.
MAS called the connectivity a "major milestone" in the development of next-generation infrastructure for cross-border payments between Singapore and India.
It was also "closely aligned" with the Group of 20's (G20) financial inclusion priorities of driving faster, cheaper and more transparent cross-border payments.
The PayNow-UPI linkage will further anchor the "substantial trade, travel and remittance flows" between Singapore and India, added the central bank.
In April, Singapore's PayNow and Thailand's PromptPay were also linked in a cross-border payment system.