After Singapore, India plans to expand cross-border connectivity of real-time digital payments to the UAE and Indonesia.
India’s transition from physical currency to digital payments has been a fascinating journey, with significant developments in recent years. In April 2016, the National Payments Corporation of India (NPCI) introduced a revolutionary payment platform called ‘Unified Payment Interface (UPI)’, which started as a pilot program with 21 member banks in Mumbai.
Fast forward to today, UPI has become an integral part of daily life for millions of Indians, transforming the way we used to transact.
During the pandemic, UPI proved to be a game-changer in India’s financial landscape, witnessing a surge in usage like never before. With over 74 billion transactions worth Rs 125.94 lakh crore in 2022, UPI became the go-to payment platform for millions of Indians. Furthermore, UPI’s cross-border payment connectivity with Singapore’s PayNow opened new avenues for seamless international transactions.
What’s Happening?
India has become a global leader in digital payments, and now Indians living in Singapore can transfer money to India using UPI. A real-time payment system linkage program was launched between India and Singapore on 21st February 2023.
According to RBI, users can transfer money stored in their bank account or e-wallet in India using UPI ID, mobile number, or virtual payment address (VPA). Indian users can send a maximum of Rs 60,000 (equivalent to around SGD 1,000) daily.
Who Will Benefit From This Move?
It’s a win-win situation for both India and Singapore! Integrating their payment systems means that people from both countries will benefit. Migrant workers and students, in particular, will find it easier and more affordable to send remittance money to India using UPI and PayNow. With over 4 lakh Indians living in Singapore and cross-border transactions exceeding $1 billion annually, this new payment system is set to make a big impact!
Which Banks Will Provide This Facility?
It’s great news for those using the State Bank of India, Indian Overseas Bank, Indian Bank, and ICICI Bank! They’ll be able to easily send and receive money using the new payment system between India and Singapore. Meanwhile, those banking with Axis Bank and DBS India can only send money from Singapore to India. More banks are expected to join the program in the future!
What’s Next?
It is exciting news for India’s financial sector! According to Business Standard, the RBI governor predicts that remittances from abroad will help to reduce the current account deficit. Moreover, The World Bank has said that about $100 billion is expected to be sent to India from abroad in the current year through digital payment.
India is rapidly becoming a leader in fintech innovation, with a global role in digital payment infrastructure, making it easier for Indian users to conduct business overseas. Moreover, according to Financial Express, agreements have been signed with many countries to expand UPI services outside India.
India’s UPI service is set to expand outside the country, with launches planned for Australia, Canada, Cambodia, Vietnam, Japan, and Taiwan. After a successful launch in Singapore, the UPI service may soon be introduced in UAE, Mauritius, and Indonesia.
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