UPI-PAYNOW LINKAGE

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Context

• India’s Unified Payments Interface — better known as UPI — and Singapore’s PayNow have been officially integrated.

Background and Details

• The project to link both the fast payment systems was initiated in September 2021 to facilitate faster, more efficient and transparent cross-border transactions relating to trade, travel and remittances between the two countries.
• They allow for a “real-time payment linkage”.
• This will enable faster remittances between the two countries at a competitive rate.

What are UPI and PayNow?

UPI

• Unified Payments Interface (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.
• It eliminates the risk of sharing bank account details by the remitter.
• UPI supports both Person-to-Person (P2P) and Person-to-Merchant (P2M) payments and it also enables a user to send or receive money.

Read all about UPI in detail: https://iasgyan.in/daily-current-affairs/upi-4

PayNow

• 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) in Singapore.
• It allows users to send and receive instant funds from one bank or e-wallet account to another in Singapore by using just their mobile number, Singapore National Registration Identity Card (NRIC)/Foreign Identification Number (FIN), or VPA.

Significance of the UPI-PayNow linkage

• 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 between India and Singapore and closely aligns with the G20’s financial inclusion priorities of driving faster, cheaper and more transparent cross-border payments.

How will it benefit the citizens of both countries?

• The UPI-PayNow linkage will enable users of each of the two fast payment systems to make instant, low-cost fund transfers on a reciprocal basis 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 from Singapore to India and vice-versa.
• Of the total inward remittances to India in 2020-21, the share of Singapore stood at 5.7 per cent, according to the RBI Remittance Survey, 2021.

https://www.thehindu.com/news/national/india-singapore-launch-upi-paynow-linkage/article66536960.ece