The cross-border payment tie-up between Singapore’s PayNow and India’s Unified Payments Interface, the first international payment systems link to use scalable cloud-based infrastructure, is currently clocking close to 3,000 transactions a month, benefiting the Indian diaspora through a sharp reduction in remittance costs.
“At present, there are around 100 transactions taking place per day. There is a growing acceptance of the PayNow-UPI linkage as a viable, cheaper, and quicker way to handle cross-border transactions,” a source aware of the developments said to ET.
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On February 21, India and Singapore launched the real-term linkage between the UPI and PayNow to facilitate instant and cost-effective cross-border fund transfers. Money transfers can be made from India to Singapore using mobile numbers and from Singapore to India using virtual payment addresses.
“Funds held in bank accounts or e-wallets can be transferred to/from India using just the UPI-id, mobile number, or Virtual Payment Address (VPA),” the RBI had said at the time, specifying a remittance limit of up to ₹60,000 per day for users from India.
While the National Payments Corporation of India (NPCI) provides statistics on products such as the UPI, the Immediate Payment Service (IMPS), the National Financial Switch and the BHIM Aadhaar Pay amongst others, it has not yet published official data on the PayNow-UPI linkage.
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In the case of the PayNow-UPI linkage, reports said that for workers staying in Singapore for a brief period, the linkage would help them save at least 10% of the amount paid as bank fees for money transfers. Accounting for persons of Indian origin and non-resident Indians, there are around 650,000 Indians in Singapore.
The participating entities in Singapore are DBS Bank Singapore and the Liquid Group, which is a non-bank financial institution.
Six banks – Axis Bank, DBS Bank India, ICICI Bank, Indian Bank, Indian Overseas Bank and State Bank of India – are designated for receiving remittances, the Reserve Bank of India said. Four banks – ICICI, Indian Bank, Indian Overseas Bank and State Bank of India – are designated for sending remittances.
The PayNow-UPI linkage, which was based on collaboration between the RBI, the Monetary Authority of Singapore, the NPCI and the Singapore-based Banking Computer Services can use its scalable cloud infrastructure to provide for future increases in the volume of remittance traffic.
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Revamping cross-border flows
Over the past year, Indian authorities have pushed for cheaper ways to facilitate cross-border remittances. In September, RBI deputy governor T Rabi Sankar said that in the age of inexpensive data connectivity, it was “unconscionable” that average costs of cross-border remittances were at their prevailing elevated levels.
The RBI had in July signed a memorandum of understanding with the central bank of the UAE regarding the interlinking of mutual payments and messaging.
The list of countries which have tied up with the NPCI has grown considerably over the past couple of years. NPCI International Payments Limited (NIPL) tied up 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.
Last year, the NIPL also signed an MoU with payment solutions provider PayXpert to enable Indian payment solutions in the UK. In 2022, India saw a record $100 billion worth of remittances, 12% higher than a year ago.
