India and Singapore link their payment gateways. Know who will gain

Date : 22/02/2023
Read: 3 mins

Linking of UPI and PayNow and the possible benefits

India's Unified Payment Interface (UPI) has become the most often-used payment gateway thanks to its simplicity and convenience. In 2022 alone, about 74 billion UPI transactions were carried out worth Rs.126 trillion. And now, the Indian Government has gone one step ahead and made the platform available for international fund transfers too.

India and Singapore have facilitated the cross-border linking of their individual payment platforms. India’s UPI has now been integrated with Singapore’s PayNow for easier international payments.

The concept of integrating India and Singapore’s payment gateway was introduced by Ravi Menon and Shaktikanta Das. While the former is the Monetary Authority of Singapore’s managing director, the latter is the Governor of the RBI. After that, the Indian Prime Minister, Mr Narendra Modi and Singapore’s Lee Hsien Loong launched the initiative formally.

Benefits of the integration

With the payment gateways integrated with one another, the landscape of international remittances has seen a considerable shift towards easier cross-border payments. The integration will result in the following benefits –

Sending money internationally will simplify and become easier and more convenient.
It will also reduce the cost of international remittances and is expected to bring it down considerably.
The flow of international remittances and trade between Singapore and India is expected to increase.
Migrant workers, small businesses and tourists would be benefitted as payments get easier.
Cross-border payments between the other ASEAN countries and India are also expected to be benefitted. This will, in turn, boost international digital payments.
Consumers would be more likely to adopt the digitized modes of payment and fintech services.
The fund transfer would be safe, transparent and instant from the comfort of mobile phones.
Overall, the move bolsters India’s presence as a developed nation making great strides in the digital payment eco-space.

How will the transfer work?

Fund transfers would be allowed through digital wallets or bank accounts. You can use your UPI ID, mobile number or VPA for the transfer. You would not have to provide your bank account detail or IFSC code which fosters security in fund transfers.

The facility for cross-border remittances is on a pilot basis, where a few selected banks are authorised to approve the transfer. If you are a customer of the authorised bank, you can use your net banking facility and make international fund transfers.

Besides this new development, the National Payments Corporation of India (NPCI) recently allowed its UPI payment facility to visitors from G-20 countries. Travellers from the listed countries could avail of the UPI facility at specified airports for easier payments in India. They would be allocated Prepaid Payment Instruments (PPI), a wallet which can be linked to their UPI ID for hassle-free payments.