India and Singapore are looking to link their digital payment systems UPI and PayNow to enable instant and low-cost money transfers, disrupting more than $1 billion in cross-border transactions between the two countries each year. increase.
The two countries’ central banks said in a press conference that the linkage between the two systems had started on Tuesday. Currently, his eight banks in Singapore and India, including DBS, Liquid Group, Axis Bank and State Bank of India, are participating in the partnership, they said. Citizens of each country can use local payment systems to send money to people living abroad in “real time”.
According to the Reserve Bank of India, for now, users in India can send up to S$1,000 per day.
The two countries have announced plans to link their payment systems in 2021, originally setting a July 2022 deadline to start the collaboration. “The PayNow-UPI collaboration is India’s first cross-border real-time system collaboration and his second in Singapore. Singapore Prime Minister Lee Hsien Loong said at the conference that cloud-based infrastructure and the participation of non-bank financial institutions It is also the world’s first linkage featuring
“As we add more users and use cases over time, the PayNow and UPI link will grow in usefulness and further contribute to facilitating our transactions and person-to-person links,” he said. added.
UPI, a seven-year-old payment infrastructure developed by a coalition of retail banks, has become the most popular way for Indians to transact online.
The system has been adopted by dozens of local and global companies, including Walmart, Google and Facebook, processing over 8 billion transactions per month. Similar to UPI, Singapore’s PayNow will also provide interoperability between domestic banks and payment apps, allowing users of one payment app to transact with users of other apps.
Nearly 250 million people worldwide send more than $500 billion in cross-border money transfers annually, according to Citi. But space is ripe for chaos. “Unusually high fees. It is embarrassing that we have not been able to resolve this issue so far,” wrote a Citi analyst. The global average cost of sending money is around 6.5%.
Tuesday’s announcement is the latest in New Delhi’s ongoing efforts to launch technology infrastructure such as UPI and DigiLocker and expand it to other countries. India will use her current presidency of the G20 Forum to make presentations to other countries on digital infrastructure.
