India-Singapore digital payments clocks 100 transactions per day

The partnership between Singapore’s PayNow and India’s Unified Payments Interface (UPI) in cross-border payments has achieved a noteworthy milestone, handling nearly 3,000 transactions every month. This innovative collaboration harnesses scalable cloud-based infrastructure, setting a precedent as the inaugural international payment systems link of its nature.

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The cross-border payment tie-up between Singapore’s PayNow and India’s Unified Payments Interface (UPI) has marked a significant milestone, with close to 3,000 transactions processed each month. This groundbreaking collaboration leverages scalable cloud-based infrastructure, making it the first international payment systems link of its kind. The partnership has not only streamlined the process of cross-border fund transfers but has also led to a substantial reduction in remittance costs, benefiting the Indian diaspora.

The PayNow-UPI linkage, launched on February 21, offers a cost-effective and instantaneous solution for individuals looking to transfer funds between India and Singapore. The system allows for money transfers from India to Singapore using mobile numbers and from Singapore to India through virtual payment addresses. With the convenience of using the UPI-id, mobile number, or Virtual Payment Address (VPA), individuals can transfer funds from their bank accounts or e-wallets. The Reserve Bank of India (RBI) specified a remittance limit of up to Rs 60,000 per day, making it accessible to a wide range of users.

While the National Payments Corporation of India (NPCI) provides statistics on various payment products, including UPI, Immediate Payment Service (IMPS), National Financial Switch, and BHIM Aadhaar Pay, official data on the PayNow-UPI linkage has not yet been published.

Indian authorities have been actively seeking more cost-effective means of facilitating cross-border remittances. RBI Deputy Governor T Rabi Sankar emphasized the need for lower remittance costs, especially given the era of affordable data connectivity. In July, the RBI signed a memorandum of understanding with the central bank of the UAE to interlink mutual payments and messaging, further expanding the reach of this initiative.

A World Bank report revealed that in January-March, the global average cost for sending remittances was 6.25% of the transaction value. India’s main corridors for inward remittances include the US, the UAE, the UK, Singapore, Saudi Arabia, Kuwait, Oman, Qatar, Hong Kong, and Australia. The remittance sector remains heavily dominated by three leading money transfer operators: Western Union, RIA Money Transfer, and MoneyGram.

The list of countries collaborating with the NPCI has grown significantly in recent years. NPCI International Payments Limited (NIPL) partnered with a Malaysian operator in 2021 to offer real-time remittances to India. Other partnerships involving the NPCI include those with the UAE, Oman, Nepal, Bhutan, France, Thailand, Hong Kong, and Japan. Additionally, the NIPL signed an MoU with payment solutions provider PayXpert to enable Indian payment solutions in the UK.

In 2022, India witnessed a record-breaking $100 billion worth of remittances, marking a 12% increase from the previous year. This surge in remittances underscores the importance of accessible and cost-effective cross-border payment systems, such as the PayNow-UPI linkage, in facilitating financial transactions for the Indian diaspora and beyond.