The project to link the United Payments Interface (UPI) and PayNow has been under development by the Reserve Bank of India (RBI) and Singapore's central bank, the Monetary Authority of Singapore (MAS), and is anticipated to launch very soon.
"Singapore wants to connect its PayNow with UPI and that project will finish sometime in the next few months when that happens anybody sitting in Singapore will be able to send money to their family members in India," India's High Commissioner in Singapore P Kumaran said.
The project will likely be announced by Prime Minister Narendra Modi once it is official, the envoy told ANI.
Before the Asean and related summits, which began in the Cambodian capital of Phnom Penh and are being attended by the leaders of the 10-member regional bloc, the ambassador of India to the city-state made the comments.
"For us, the practical implications sitting here is that any worker who wants to send small amounts can do so at a fraction of the money they are being charged by the standard money transfer companies. So it is going to be a big benefit to those who instead of sending money in one go can do so in small pieces and it will still cost less," the Indian envoy to Singapore said.
RuPay, a domestic card payment network in India, and PayNow are comparable. In addition, PayNow has connections with other Asean nations, making it simpler for people to buy and sell within the region.
PayNow has taken similar steps with other Asean nations as well, allowing travellers to travel from India to any Asean nation via Singapore when PayNow connects this side with India and that side with Asean nations. The Indian ambassador stated that they are working on a project with the Philippines right now.
Similar connections have been made by Malaysia and Thailand thanks to their quick payment methods.
"Eventually we will also have added connectivity and it will reduce transaction costs of remittances," The Indian envoy said.
Money can be transferred using mobile phone numbers from India to Singapore under the proposed linkage, and using UPI virtual payment addresses from Singapore to India (VPA).
2 lakh workers are thought to travel to Singapore for short-term employment, and many of them send money home. Particularly migrant workers will profit from UPI-PayNow since they typically forgo about 10% in bank transfer fees.
Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam are among the ten nations that make up Asean.
The Asean region's economy has grown to be the fifth-largest in the world. A partnership like UPI-PayNow may serve as a template for the construction of a cross-border payment system between India and the Asean nations.
The PayNow - UPI link is anticipated to become much more common once it is accepted. By scanning UPI-based QR (Quick Response) codes, a system of interconnecting payment systems would make it simpler for people to buy and sell within the region. Much easier is UPI-based or QR code-based.
"Most Indian tourists who come here do not have a RuPay card and even if they have it they might have the domestic RuPay card so it is a bit complicated. So in future, we see a lot of people leaning to digitalisation not carrying a lot of cash not dependant on international credit cards which have very high fees," the Indian High Commissioner in Singapore said.
The project to link their fast payment systems was first announced by the Reserve Bank of India (RBI) and the Monetary Authority of Singapore (MAS) earlier in 2021. Its operationalization is planned for July 2022.
The new cross-border payment methods can speed up, simplify, and significantly reduce the cost of financial transactions between nations in the region.
Such Asean collaboration on payment connectivity would be advantageous for migrant workers, tourists, small businesses, and enterprises.
(With inputs from ANI)
