- The central banks of India and Singapore will link their respective fast digital payment systems – Unified Payments Interface (UPI) and PayNow – for “instant, low-cost, cross-border fund transfers”.
- The linkage is targeted to be operationalised by July 2022.
- The Unified Payments Interface (UPI)-PayNow linkage is a significant milestone in the development of infrastructure for cross-border payments between India and Singapore, and closely aligns with the G20’s financial inclusion priorities of driving faster, cheaper and more transparent cross-border payments.
- The linkage builds upon the earlier efforts of NPCI International Private Ltd (NIPL) and Network for Electronic Transfers (NETS, Singapore) to foster cross-border interoperability of payments using cards and QR codes between India and Singapore and will anchor trade, travel and remittance flows between the two countries.
- NIPL is the subsidiary of NPCI to popularise domestic payments technologies such as UPI and RuPay abroad and co-create payment technologies with other countries.
- The initiative is in line with its vision of reviewing corridors and charges for inbound cross-border remittances outlined in the Payment Systems Vision Document 2019-21
- From an investing perspective, this will incentivize more retail investors to access global markets. Currently, they pay up to Rs.3,000 in inter-bank charges which are over and above the Liberalised Remittance Scheme (LRS) processing fees by banks.
Unified Payments Interface:
- It is an advanced version of Immediate Payment Service (IMPS)- round–the-clock funds transfer service to make cashless payments faster, easier and smoother.
- UPI is a system that powers multiple bank accounts into a single mobile application (of any participating bank), merging several banking features, seamless fund routing & merchant payments into one hood.
- National Payments Corporation of India (NPCI) launched UPI with 21 member banks in 2016.
SOURCE: THE HINDU,THE ECONOMIC TIMES,MINT