India's UPI & Singapore's PayNow launched a real-time link for cross-border payments

By: Asia Business Outlook Team | Tuesday, 21 February 2023

India and Singapore have established a real-time link to facilitate cross-border money transfers between one of the world's largest remittance recipients and an Asian financial powerhouse.

Fund transfers will now be possible using only mobile phones thanks to a collaboration between India's Unified Payments Interface (UPI) and Singapore's facility. Such cross-border transfer arrangements typically reduce payment costs.

"This will enable people from both countries to transfer funds immediately and at low cost (by) simply using their mobile phones," Indian Prime Minister Narendra Modi said at a virtual event to mark the service's launch. According to Modi, the link will benefit migrant workers, professionals, students, and their families.

UPI is an instant real-time payments system that allows users to transfer money between banks without disclosing bank account information. Similarly, PayNow is a service provided by participating banks that allows Singapore dollar funds to be transferred from one bank to another using a mobile number.

To begin, the Reserve Bank of India (RBI) announced that 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.

The service will be available in Singapore through DBS-Singapore and Liquid Group, a non-bank financial institution. The RBI stated that more banks will be added to the linkage over time.

To begin with, an Indian user can remit up to 60,000 Indian rupees ($725.16) a day.

At the launch event, Singapore’s Prime Minister Lee Hsien Loong said that cross-border retail payments and remittances between India and Singapore currently amount to over $1 billion annually.

“The UPI-PayNow linkage will grow in utility and will contribute more in facilitating trade,” Lee said.