UPI GLOBAL

1. Context

2. Unified Payments Interface (UPI)

• Unified Payments Interface (UPI) is India'a mobile-based fast payment system, which facilitates customers to make round-the-clock payments instantly, using a Virtual Payment Address (VPA) created by the customer.
• It eliminates the risk of sharing bank account details by the remitter.
• UPI supports both person-to-person (P2P) and Person-to- Merchant (P2M) payments and it also enables a user to send or receive money.

3. PayNow

• PayNow is a fast payment system in Singapore.
• It enables peer-to-peer funds transfer service, available to retail customers through participating banks and NonBank Financial Institutions (NFIs) in Singapore.
• It allows users to send and receive instant funds from one bank or e-wallet account to another in Singapore by using just their mobile number, Singapore National Registration Identity Card (NRIC)/ Foreign Identification Number (FIN), or VPA.

4. Linkage of UPI and PayNow

• Cross-border retail payments are generally less transparent and more expensive than domestic transactions.
• The UPI-PayNow linkage is a significant milestone in the development of infrastructure for cross-border payments between India and Singapore and closely aligns with the G20's financial inclusion priorities of driving faster, cheaper, and more transparent cross-border payments.
• India is chairing the G20 on basis of the rotational membership structure this year.
• Singapore, although not a G20 member, has been invited to participate in the G20 summits and its related processes from 2010 to 2011 and from 2013 to 2023.
• The project to link both the fast payment systems was initiated in September 2021 to facilitate faster, more efficient, and transparent cross-border transactions relating to trade, travel, and remittances between the two countries.

5. Benefits to the citizens of both countries

• The UPI-PayNow linkage will enable users of each of the two fast payment systems to make instant, low-cost fund transfers on a reciprocal basis without a need to get on board the other payment system.
• It will also help the Indian diaspora in Singapore, especially migrant workers, and students, through the instantaneous and low-cost transfer of money from Singapore to India and Vice-Versa.
• Of the total inward remittances to India in 2020-21, the share of Singapore stood at 5.7 percent, according to the RBI Remittance Survey, 2021.

National Payments Corporation of India (NPCI)

For Prelims