As India and Singapore on Tuesday launched cross-border connectivity in digital transactions, Prime Minister Narendra Modi called it a new chapter of cross-border transactions, adding, “Many experts are estimating that very soon India’s digital wallet transactions are going to overtake cash transactions.”
A large number of transactions via UPI demonstrate that this indigenously designed payment system is very secure, said Modi.
He also said this facility will benefit students and migrant workers. Funds can now be transferred through a mobile phone in real time.
Making these observations after witnessing the launch through video conference with his Singapore counterpart Lee Hsien Loong between the UPI and PayNow of Singapore, he also said about 74 billion transactions amounting to more than `126 trillion, which is approximately 2 trillion Singapore dollar, was done through UPI in 2022.
Prime Minister Lee said the linkage between India’s Unified Payments Interface (UPI) and Singapore’s PayNow will allow people in the two countries to undertake faster and cost-efficient digital transfers, and exuded hope that this “strong partnership” will continue to spawn innovative technology solutions.
He also said the idea of linking PayNow and UPI was first conceived in 2018 when Modi visited Singapore.
The facility was launched through token transactions by Reserve Bank of India Governor Shaktikanta Das and Managing Director of Monetary Authority of Singapore Ravi Menon using the UPI-PayNow linkage.
Stressing that the linkage of UPI and PayNow is a new milestone in India-Singapore relations, Modi said, this will help people of both the countries to do cross-border transactions through mobile phone in an affordable manner.
Singapore is the first country with which cross-border Person-to-Person (P2P) payment facility has been launched, he said, adding, this will help the Indian diaspora in Singapore, especially migrant workers, students and bring the benefits of digitalisation and fintech to the common man through instantaneous and low-cost transfer of money from Singapore to India and vice-versa.
Pointing out that the focus of the Government is to promote innovation and modernisation, Modi said the Digital India programme of the Government has enhanced “Ease of Living” and “Ease of Doing Business” and digital connectivity and has pushed financial inclusion.
The Digital India programme has brought in significant reforms in governance and public service delivery.
The linkage will enable users of the two fast payment systems in either country to make convenient, safe, instant, and cost-effective cross-border fund transfers using their respective mobile apps.
Funds held in bank accounts or e-wallets can be transferred to or from India using just the UPI-id, mobile number, or Virtual Payment Address (VPA), the Reserve Bank of India said in a statement.
To begin with, the statement said State Bank of India, Indian Overseas Bank, Indian Bank and ICICI Bank will facilitate both inward and outward remittances, while Axis Bank and DBS India will facilitate inward remittances.
For Singapore users, the service will be made available through DBS-Singapore and Liquid Group (a non-bank financial institution). More banks will be included in the linkage over time.
Customers of the above participating banks can undertake cross-border remittances to Singapore using the bank’s mobile banking app or internet banking.
To begin with, an Indian user can remit up to Rs 60,000 in a day (equivalent to around SGD 1,000). At the time of making the transaction, the system shall dynamically calculate and display the amount in both currencies for the convenience of the user, it said.
The UPI-PayNow linkage is the product of extensive collaboration between the RBI, Monetary Authority of Singapore (MAS), and Payment System Operators of both countries viz. NPCI International Payments Limited (NIPL) and Banking Computer Services Pte Ltd (BCS), and participating banks / non-bank financial institutions. This inter linkage aligns with the G20’s financial inclusion priorities of driving faster, cheaper and more transparent cross-border payments and will be a significant milestone in the development of infrastructure for cross-border payments between India and Singapore, the statement said.
The virtual launch was preceded by a phone call between the two Prime Ministers, wherein discussions were held on areas of mutual interest. Prime Minister Modi thanked Prime Minister Lee for his partnership in taking the India-Singapore relationship forward and looked forward to working with him under India’s G20 Presidency. “The PayNow-UPI linkage will offer cheaper, faster, and safer cross-border retail payments and remittances, for businesses and individuals alike, directly between bank accounts or e-wallets,” Singapore’s Prime Minister’s Office said in a statement.
The move will also help the Indian diaspora in Singapore, especially migrant workers and students, through the instantaneous and low-cost transfer of money from Singapore to India and vice-versa. “I hope this strong partnership between Singapore and India will continue to spawn innovative technology solutions and create more cross-border opportunities for our digital economies,” the PMO statement said.