
India and Singapore Link Fast Payment Systems – UPI & PayNow
With global economies being interconnected increasingly, the demand for instant, cheaper, and secure cross-border payments is growing.
On September 14, 2021, the Reserve Bank of India (RBI), together with the Monetary Authority of Singapore (MAS) announced their plan to link their fast payment interfaces, UPI (Unified Payment Interface), and PayNow, respectively. This policy would enable users to make low-cost, instant, and transparent fund transfers, on a reciprocal basis, without getting onboarded onto the other payment interface. The aim is to make the linkage of these fast payment systems operational by July 2022.
This initiative is in line with the financial inclusion priorities of the G20, to drive more transparent, cheaper, and faster cross-border transactions. The decision also closely aligns with the RBI’s idea of revaluating charges and corridors for inbound cross-border remittance, which was outlined in its 2019-2021 vision for Payments and Settlements Systems in India.
Customer Issues with the Current System
Presently, financial transactions from Singapore to India can happen only through a rupee-denominated NRE (non-resident external) account. To transfer money from India to Singapore, an individual must fill an LRS (Liberalised Remittance Scheme) form, and incur heavy charges. Money takes around 1-7 days to reach the beneficiaries.
The Indian rupee is not completely convertible. So, although a person can receive foreign exchange freely, a limit is imposed on fund transfers. The present limit set by the LRS is up to $250,000 annually. On the other hand, the Singapore dollar can be freely transferred.

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There is yet to be any clarity on details like transfer limits, exchange rates, and more. However, experts say that similar systems can be established for fund transfers from the Middle East and the United States, both of which constitute the largest remittance corridors for India.
What are UPI and PayNow Payment Systems?
UPI or Unified Payments Interface is a mobile-based fast payment system that allows customers to make all-day transactions using a VPA (Virtual Payment Address) generated by the customer. This removes the remitter’s risk of sharing personal bank account details. UPI backs both Person-to-Merchant (P2M) and Person-to-Person (P2P) payments, enabling users to receive or send money digitally.
PayNow is a rapid payment system of Singapore that allows the transfer of peer-to-peer funds. Retail customers can use it via NFIs (Non-Bank Financial Institutions) and participating banks in Singapore. It enables instant transfers from one e-wallet or bank account to another using just the VPA, Singapore FIN/NRIC, or mobile number of the customers.
The All-Round Benefits of the UPI-PayNow Linkage
This initiative builds upon the previous efforts of the NETS (Network for Electronic Transfers) and NIPL (NPCI International Private Limited) to foster cross-border interoperability of payments between the two countries using QR codes and cards. It will further help increase contactless remittance flows, travel, and trade between India and Singapore. This is good news for India, which was the largest receiver of inbound remittances in 2020. Not only could this initiative help the country retain that place, but can also help individuals to seek investment opportunities in Singapore’s financial markets.