The “real-time payment linkage” between India’s Unified Payments Interface and Singapore’s PayNow is an initiative to push a UPI-based cost ecosystem. Photo: Twitter/@MAS_sg
The story thus far: On February 21, India’s Unified Payments Interface (UPI) and Singapore’s PayNow had been formally linked to permit for “real-time payment linkage”. Singapore is the primary nation with which cross-border Person to Person (P2P) cost services have been launched. The plan was first introduced by the Reserve Bank of India (RBI) and the Monetary Authority of Singapore (MAS) in September 2021 to facilitate on the spot low-cost, cross-border fund switch.
How will it assist?
When the scheme was introduced, the RBI had stated that the cross-border interoperability of funds utilizing playing cards and QR codes between India and Singapore would additional anchor commerce, journey and remittance flows between the 2 international locations. The initiative is part of the federal government’s push in direction of a UPI-based cost ecosystem. In January 2023, the National Payments Corporation of India (NPCI) enabled worldwide cellphone numbers to have the ability to transact utilizing UPI. The Union Cabinet had accredited incentivisation schemes for selling low-value BHIM-UPI transactions in April 2022.
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On February 21, Prime Minister Narendra Modi and his counterpart, Singapore Prime Minister Lee Hsien Loong, attended the digital launch. The Ministry of External Affairs stated this might assist the Indian diaspora in Singapore, particularly migrant employees and college students and “bring the benefits of digitalisation and fintech to the common man through instantaneous and low-cost transfer of money from Singapore to India and vice-versa.”
How will the scheme work?
For customers on the Indian finish, State Bank of India, Indian Overseas Bank, Indian Bank and ICICI Bank will facilitate each inward and outward remittances, whereas Axis Bank and DBS India will solely facilitate inward remittances for now. DBS-Singapore and Liquid Group, a fintech firm, will facilitate the service for customers in Singapore. More banks will probably be included within the linkage with time, the RBI stated in a press launch. Account holders of listed banks can switch funds to/from India utilizing their UPI ID, cell quantity, or Virtual Payment Address (VPA). To start with, Indian customers can remit as much as ₹60,000 per day. This is the same as round $ (Singapore) 1,000. Cross-border remittances to Singapore may be carried out by means of the financial institution’s cell utility or web banking services. Apps of taking part Indian banks may have an decide in/decide out characteristic for receiving remittances from Singapore. Currently, solely UPI IDs registered with the identical financial institution the place an account is held can be utilized to obtain remittances in accounts of taking part banks. The P2P remittances between India and Singapore are solely allowed for functions of “maintenance of relatives abroad” and “gifts”. According to the RBI, taking part banks will roll out updates to permit international remittances of their UPI apps in a phased method.
India has additionally thought of permitting UPI remittances from different international locations just like the United Arab Emirates (UAE) which hosts a big Indian inhabitants. In November 2022, India and UAE mentioned permitting cross-border remittances by means of UPI platforms throughout a gathering between External Affairs Minister S. Jaishankar and UAE Foreign Minister Sheikh Abdullah bin Zayed Al Nahyan in New Delhi.
What are real-time funds (RTP)?
As the identify suggests, real-time funds are cash transfers which might be principally settled as quickly as they’re carried out. RTPs are allowed 24×7, one year a 12 months. They assist simplify the method of fund switch in addition to ease communication between the payer and the payee. P2P funds contain the switch of funds from one consumer’s checking account to a different by means of a digital medium. Common examples of P2P cell apps in India embody GPay and Paytm. Using P2P funds eliminates the chance of sharing checking account particulars. In 2022, UPI funds price ₹8,31,993.11 crore had been recorded in January. This determine climbed to ₹12,81,970.86 crore in December.
Source: www.thehindu.com
