Another posting about the ongoing theme of connecting two or more domestic faster payments systems into a potential real-time cross-border scenario. This piece appears in The Hindu and discusses collaboration between the central banks of India (RBI) and Singapore (MAS) to link their respective fast payments systems, UPI and PayNow. We have been commenting on the various initiatives for accomplishing connections between sovereign payments systems to facilitate easier, faster and less expensive cross-border payments, which has seen a particularly active set of efforts in south Asia.
‘The linkage is targeted to be operationalised by July 2022….“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 onboarded onto the other payment system,” the RBI said in a statement.…“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,” the RBI said.’
In this case the targeted transactions are P2P and C2B, allowing for instant transfers between customers of participating banks without having to share bank account numbers. Both systems have been in operation for roughly 4-5 years now so this initiative will be another step in the modernization of cross-border payment efforts, at east for a portion of the population and use cases.
“This initiative is also in line with RBI’s vision of reviewing corridors and charges for inbound cross-border remittances outlined in the Payment Systems Vision Document 2019-21,” it added….UPI is India’s mobile based, ‘fast payment’ system that facilitates customers to make round the clock payments instantly using a Virtual Payment Address (VPA) created by the customer….This eliminates the risk of sharing bank account details by the remitter. UPI supports both Person to Person (P2P) and Person to Merchant (P2M) payments as also it enables a user to send or receive money….PayNow is the fast payment system of Singapore which enables peer-to-peer funds transfer service, available to retail customers through participating banks and Non-Bank Financial Institutions (NFIs) in Singapore….It enables 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 NRIC/FIN, or VPA.
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group
