Friday, 17 May, 2024
By: Yash Gupte
With the integration, citizens of Singapore and India can send money to each other instantly through PayNow and UPI. Image Source: IANS
With quick and inexpensive money transfers from Singapore to India and vice versa, this will benefit the Indian diaspora in Singapore, particularly migrant workers and students, and extend the advantages of digitalization and FINTECH to the general public.
Prime Minister Narendra Modi and Prime Minister of Singapore, Mr. Lee Hsien Loong participated in the virtual launch of real time payment linkage between the Unified Payments Interface (UPI) of India and PayNow of Singapore. The first nation with which a cross-border P2P payment facility has been introduced is Singapore. With quick and inexpensive money transfers from Singapore to India and vice versa, this will benefit the Indian diaspora in Singapore, particularly migrant workers and students, and extend the advantages of digitalization and FINTECH to the general public. Acceptance of UPI payments through QR codes is already available in selected merchant outlets in Singapore.
The National Payments Corporation of India (NCPI) developed the instant real-time payment system known as UPI. The interface facilitates inter-bank peer-to-peer and person-to-merchant transactions. On the other hand, the Association of Banks in Singapore established the nearly instantaneous real-time payment system known as PayNow. With the integration, citizens of Singapore and India can send money to each other instantly through PayNow and UPI. The 24x7 cross-border connectivity project in India can be used by sending money through Google Pay, Paytm, and other comparable digital payment systems. Singaporeans can transfer money to India via virtual payments in a similar way.
Commenting on the payment linkage between the two countries, Mehul Mistry, Global Head-Strategy, Digital Financial Services & Partnerships at Wibmo said that, “Singapore is one of the top four inward remittance markets, accounting for approximately 5.7 percent of total remittances to India, or about $5.08 billion of the $100 billion total inward remittance market. A digital linkage between India’s UPI and Singapore’s PayNow means a seamless real-time fund transfers will be available for citizens of both countries, allowing for economic growth, cultural development, and social cohesion.”
Unified Payments Interface (UPI) has become one of the biggest successes of the Digital India initiative and has made sending and receiving money a breeze. According to the data released by the National Payments Corporation of India (NPCI), the platform has reported 8.03 billion transactions in January. In FY22, UPI processed more than 46 billion transactions amounting to over ₹84.17 trillion. During FY21, UPI processed 22.28 billion transactions, with an aggregate value of Rs41.03 trillion. There has been a constant month-on-month increase in UPI transactions over the years and the number of transactions has nearly doubled since last year.
The instant real-time payment system was developed by NPCI in 2016, for facilitating inter-bank transactions, has morphed into a simple, uncomplicated mobile payments option, embraced by Indians in spectacular numbers. UPI crossed 1 billion transactions for the first time in October 2019. The next billion came in under a year in October 2020. In the next 10 months, UPI processed 3 billion transactions. In the next 10 months, UPI processed 3 billion transactions. And, it took only three months for the payments platform to reach 4 billion transactions per month. And, the incremental one billion transactions were achieved in just six months.
For millions of small traders, kirana shop keepers, hand cart vegetable vendors, mandi sellers, a UPI seller app ensured that they could continue to do business. The simplicity of a UPI app on a smart phone of which there are 750 million in use India, has made UPI almost a default app on every handset.
Buoyed with the success, NPCI International Payments Limited (NIPL), the international arm of NPCI has given a global push to UPI. It is presently engaged with more than 30 countries for the adoption of UPI. It has partnered with domestic companies in countries like UAE, France Singapore, Bhutan and Nepal to enable Indians to make use of UPI when they travel. Today, merchants in Bhutan, Cambodia, Malaysia, Philippines, Singapore and Vietnam already accept UPI payments, thanks to cross border payment agreements.
The chart below shows the volume of UPI transactions per month from January 2022 to January 2023.
From 4617.15 million transactions in January 2022 to 8038.59 million transactions in January 2023, the UPI transactions have nearly doubled year-on-year. This shows the success story and the rising popularity of UPI among Indians. Nowadays, UPI is one of the most preferred mode of transactions among people in India. The launch of UPI has also contributed in increasing the financial literacy which is one of the prerequisites for a successful and healthy economy. With the launch of real time payment linkage between the Unified Payments Interface (UPI) of India and PayNow of Singapore, the central government and the NPCI has added an another feather to their caps.
