UPI-PayNow linkage
The launch of cross-border linkage between India’s Unified Payments Interface (UPI) and Singapore’s PayNow is a major milestone for the Digital India programme, which has ‘ease of doing business’ among its focus areas. This facility is aimed at enabling business establishments and individual citizens of both countries to make real-time digital payments through apps. According to the Monetary Authority of Singapore, a counterpart of the Reserve Bank of India, the UPI-PayNow setup is equipped to accommodate future increases in the volume of remittance traffic.
Singapore is one of India’s most trusted and valued business partners. Cross-border retail payments and remittances between the two countries amount to over $1 billion annually. The share of remittances to India by NRIs from the US, UK and Singapore increased from 26 per cent to over 36 per cent between 2016-17 and 2020-21. Moreover, the Indian diaspora accounts for over 9 per cent of the population of this tiny but affluent Southeast Asian country, whose GDP per capita is among the highest in the world. The UPI-PayNow connectivity is expected to particularly benefit Indian migrant workers and students based in Singapore. The sustained success of PayNow’s fast payment system linkage with Thailand’s PromptPay, initiated in April 2021, should make Indian users confident about the viability and reliability of the new venture.
Digital payments are helpful in bringing transparency in financial transactions and curbing the generation of black money, besides reducing tax evasion. Citing experts’ estimates, PM Narendra Modi has stated that digital transactions will soon surpass cash payments in India. However, the fact that over 99 per cent of the demonetised currency found its way back to the banks points to chinks in the cashless payment ecosystem. Along with efforts to make UPI more robust and popular across the country, it is imperative to tap the international potential of this unified interface. The pact with Singapore should spur India to launch cheaper, faster and safer cross-border transactions with other countries. This can give a fillip to the digital dreams of the world’s fastest-growing major economy and raise India’s stature as a sought-after investment destination.
