India- Singapore UPI-PayNow Linkage


    In News

    • India’s payment system Unified Payments Interface (UPI) and its equivalent network in Singapore called PayNow, were integrated to enable faster remittances between the two countries at a competitive rate.

    UPI and Paynow

    • UPI is India’s mobile-based fast payment system, which facilitates customers to make round-the-clock payments instantly, using a Virtual Payment Address (VPA) created by the customer. 
    • UPI supports both Person-to-Person (P2P) and Person-to-Merchant (P2M) payments and it also enables a user to send or receive money.
    • PayNow is a fast payment system in Singapore. It enables peer-to-peer funds transfer service, available to retail customers through participating banks and Non-Bank Financial Institutions (NFIs). 

    Significance of the linking Payment Systems

    • Cross-border retail payments are generally less transparent and more expensive than domestic transactions. The UPI-PayNow linkage is a significant milestone in the development of infrastructure for cross-border payments and aligns with the G20’s financial inclusion priorities of cross-border payments.
    • The UPI-PayNow linkage will enable users of the two fast payment systems to make transactions without a need to get on board the other payment system.
    • It will also help the Indian diaspora in Singapore, especially migrant workers and students, through the instantaneous and low-cost transfer of money.

    UPI and National Payments Corporation of India (NPCI)

    • UPI: It is a system that powers multiple bank accounts into a single mobile application merging several banking features, seamless fund routing & merchant payments into one hood. It was developed by NPCI in 2016.
    • NPCI: It is an umbrella organisation for operating retail payments and settlement systems in India, established by the Reserve Bank of India (RBI) and the Indian Banks’ Association (IBA) in 2008 under the provisions of the Payment and Settlement Systems Act, 2007.
    • It has been incorporated as a “Not for Profit” Company under the provisions of Section 25 of the Companies Act 1956 (now Section 8 of the Companies Act 2013), with an intention to provide infrastructure to the entire Banking system in India for physical as well as electronic payment and settlement systems.