Indian Prime Minister Narendra Modi and his Singapore counterpart Lee Hsien Loong today launched the cross-border linkage between (Unified Payment Interface) UPI and PayNow. “Linkage of UPI and PayNow is going to be a milestone in India-Singapore relations”, PM said during the virtual launch of the linkage.
RBI Governor Shaktikanta Das and Ravi Menon, Managing Director of Monetary Authority of India were also present at the virtual meeting.
The MAS and the RBI had signed a Memorandum of Understanding (MoU) to link Singapore’s PayNow and India’s UPI real-time payment systems last September.
With the help of this linkage system, the residents of both the countries will be able to do cross border transactions with lesser time and in more cost-efficient way. The implementation of the project will bring down the cost of sending remittances by as much as 10 percent
“This system will help the Indians diaspora in Singapore, especially migrant workers and students through instantaneous and low-cost transfer from Singapore and vice-a-versa”, PM office said in a release.
“Singapore has completely integrated UPI and other countries are working on an urgent basis to integrate their payment system with UPI. Most important in UPI is trust—the entire payment system is based on privacy protection and the government does not completely own the system. National Payment Corporation of India (NPCI) is a company in which both the government and other stakeholders have share holding,” Minister for Electronics and Information Technology and Communications, Ashwini Vaishnaw said that G20 conference in Lucknow last week. He added that India has signed MoU with 13 countries that want to adopt the Unified Payments Interface (UPI) for digital payments.
India has emerged as the fastest growing ecosystem for fintech innovation. The India business PhonePe, which specialises in financial technology and digital payments, introduced cross-border UPI payment functionality earlier this month.
Users of the app can make purchases at merchant locations in the UAE, Singapore, Mauritius, Nepal, and Bhutan using their Indian bank accounts.
Reserve Bank of India proposed to permit all inbound travellers in India to use the UPI service for their merchant payment while they are in the country. Non-resident Indians (NRIs) holding bank accounts in India will also be able to use the UPI service with their international mobile numbers. Under certain conditions, the National Payments Corporation of India (NPCI) has allowed UPI platforms to onboard NRIs from ten countries to transact through international mobile numbers.
According to an official release by NCPI on January 10,2023, they will enable transactions from mobile numbers having the country codes of Singapore, Australia, Canada, Hong Kong, Oman, Qatar, USA, Saudi Arabia, United Arab Emirates, and the United Kingdom, along with the current domestic country code.
The NPCI statistics shows that in December 2022, UPI recorded a record 7.82 billion transactions worth Rs. 12.82 trillion. Around 74 billion UPI transactions totalling Rs 125.94 trillion were made in the calendar year 2022 as compared to 38 billion transactions worth Rs 71.54 trillion in 2021, representing an increase of 90 percent, with an average yearly value growth of 76 percent.
According to the NCPI circular, to access UPI transactions with their international mobile numbers, NRIs must have NRE or NRO accounts.
NRE or NRO accounts must only be permitted in accordance with the current FEMA (Foreign Exchange Management Act) laws and adherence to the rules/instructions provided by the institution, according to member banks.
To begin with, the facility will be extended to G-20 travellers arriving at the selected international airports.
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