Indians can now use Google Pay, PayTM and other digital payment systems to send money to their friends, colleagues and relatives in Singapore as Unified Payments Interface (UPI) gets connected to PayNow on Tuesday, February 21.
Enabling faster and cost-efficient transfer of money, the linkage of two real-time payment systems will be witnessed by Prime Minister Narendra Modi and his Singapore counterpart Lee Hsien Loong via videoconferencing.
Reserve Bank of India (RBI) governor Shaktikanta Das, and Ravi Menon, managing director of the Monetary Authority of Singapore, will lead the launch (MAS) of this cross-border connectivity at 11 am.
Boost for remittances
With the integration of these two payment systems, the Centre believes that it would allow residents of both countries to send cross-border remittances more quickly and cheaply. Additionally, it is expected to benefit the Indian diaspora in Singapore, particularly migrant workers and students, by allowing for instant and low-cost money transfers from Singapore to India and vice versa.
According to the ministry of external affairs (MEA) document Population of Overseas Indians (2022), there are 6.5 lakh Indians residing in Singapore, including non-resident Indians and persons of Indian origin.
Important initiative
Mehul Mistry, Global Head-Strategy, Digital Financial Services & Partnerships at Wibmo, told News18 that Singapore is one of the top four inward remittance markets. It accounts for roughly 5.7% of all remittances to India or approximately $5.08 billion of the $100 billion total inward remittance market.
“This initiative will have several advantages such as customers outside India (in Singapore) will experience world-class payment infrastructure. This will witness the globalisation of India’s best-in-class digital payment infrastructure,” he said.
Mistry believes that residents of both countries will be able to make faster and cost-effective money movements between the two countries and they also will be able to make merchant payments using Scan QR services.
Chirag Taneja, the co-founder of Gokwik, believes that this is one of the most iconic moments in the world of cross-border e-commerce.
“With UPI and PayNow coming together, they are paving way for digital-first transactions to seamlessly expand the horizon,” he said. This new connection will empower businesses and individuals with frictionless transactions beyond borders, making international commerce more accessible and convenient than ever before, Taneja added.
From a business perspective, he said: “Businesses also face five major challenges such as cost, security, time, liquidity, and transparency while making cross-border payments. This initiative will further solve most of these problems, allowing more businesses to expand their reach in other markets.”
Dileep Seinberg, founder and CEO of MuffinPay, said that this initiative will open a new gateway for UPI-enabled Fintech platforms. He also believes that “undoubtedly this initiative will act as a strong catalyst, bringing about a profound change in how payments and purchases are made around the world”.
A spokesperson of mobile payments service Paytm told News18: “We welcome UPI-PayNow real-time payment systems linkage between India and Singapore, which will enable low-cost, instantaneous, and 24X7 fund transfer. We will continue to innovate to ensure support and earliest availability of such UPI-based cross-border payments for all.”
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