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PayNow-UPI Linkage Cuts Remittance Costs for Indian Diaspora in Singapore
PayNow-UPI Linkage Cuts Remittance Costs for Indian Diaspora in Singapore
The collaboration between Singapore’s PayNow and India’s Unified Payments Interface (UPI) has significantly reduced the cost of cross-border remittances for the Indian diaspora in Singapore. This innovative linkage, facilitated by scalable cloud-based infrastructure, has led to approximately 3,000 transactions per month, with a growing acceptance due to its cost-effectiveness and efficiency. The linkage allows for instant and cost-effective fund transfers between India and Singapore, with the ability to transfer funds using mobile numbers and virtual payment addresses. The Reserve Bank of India (RBI) has specified a remittance limit of up to 60,000 per day for users from India. Participating entities in Singapore include DBS Bank Singapore and the Liquid Group, while designated banks for receiving and sending remittances in India include Axis Bank, DBS Bank India, ICICI Bank, Indian Bank, Indian Overseas Bank, and State Bank of India. The collaboration between the RBI, the Monetary Authority of Singapore, the National Payments Corporation of India (NPCI), and the Singapore-based Banking Computer Services has paved the way for future increases in the volume of remittance traffic. Additionally, the RBI has been actively seeking cheaper ways to facilitate cross-border remittances, as evidenced by its memorandum of understanding with the central bank of the UAE and its growing list of international partnerships.
Key Takeaways:
The PayNow-UPI linkage has led to a sharp reduction in remittance costs for the Indian diaspora in Singapore, saving at least 10% of the amount paid as bank fees for money transfers.
Approximately 3,000 transactions per month are currently taking place through the PayNow-UPI linkage, with a growing acceptance due to its cost-effectiveness and efficiency.
The linkage allows for instant and cost-effective fund transfers between India and Singapore, using mobile numbers and virtual payment addresses.
The RBI has specified a remittance limit of up to 60,000 per day for users from India.
Participating entities in Singapore include DBS Bank Singapore and the Liquid Group, while designated banks for receiving and sending remittances in India include Axis Bank, DBS Bank India, ICICI Bank, Indian Bank, Indian Overseas Bank, and State Bank of India.
The collaboration between the RBI, the Monetary Authority of Singapore, the NPCI, and the Singapore-based Banking Computer Services has paved the way for future increases in the volume of remittance traffic.
The RBI has been actively seeking cheaper ways to facilitate cross-border remittances, as evidenced by its memorandum of understanding with the central bank of the UAE and its growing list of international partnerships.
The PayNow-UPI linkage has brought about a significant transformation in cross-border remittances, particularly benefiting the Indian diaspora in Singapore. Here’s a detailed breakdown of the key points mentioned in the provided information:
Key Points
1. Cost Savings: The PayNow-UPI linkage has resulted in substantial cost savings for workers staying in Singapore, with reports indicating that it helps them save at least 10% of the amount paid as bank fees for money transfers.
2. Transaction Volume: The cross-border payment tie-up between Singapore’s PayNow and India’s Unified Payments Interface (UPI) is currently processing close to 3,000 transactions per month, indicating a growing acceptance of this cost-effective and efficient method for handling cross-border transactions.
3. Instant and Cost-Effective Transfers: The real-time linkage between UPI and PayNow enables instant and cost-effective cross-border fund transfers. Money transfers can be initiated from India to Singapore using mobile numbers and from Singapore to India using virtual payment addresses.
4. Remittance Limit: The Reserve Bank of India (RBI) has specified a remittance limit of up to 60,000 per day for users from India, ensuring regulatory oversight and control over the remittance process.
5. Participating Entities: In Singapore, participating entities include DBS Bank Singapore and the Liquid Group, while in India, six banks - Axis Bank, DBS Bank India, ICICI Bank, Indian Bank, Indian Overseas Bank, and State Bank of India - are designated for receiving remittances, and four banks - ICICI, Indian Bank, Indian Overseas Bank, and State Bank of India - are designated for sending remittances.
6. Collaboration and Infrastructure: The PayNow-UPI linkage is the first international payment systems link to use scalable cloud-based infrastructure, facilitated by collaboration between the RBI, the Monetary Authority of Singapore, the National Payments Corporation of India (NPCI), and the Singapore-based Banking Computer Services. This infrastructure is poised to accommodate future increases in the volume of remittance traffic.
7. RBI’s Initiatives: The RBI has been actively seeking cheaper ways to facilitate cross-border remittances, as evidenced by its memorandum of understanding with the central bank of the UAE and its growing list of international partnerships.
8. NPCI’s International Partnerships: The National Payments Corporation of India (NPCI) has expanded its international partnerships, including tie-ups with countries such as Malaysia, UAE, Oman, Nepal, Bhutan, France, Thailand, Hong Kong, and Japan, to offer real-time remittances to India.
9. Record Remittances: In 2022, India witnessed a record $100 billion worth of remittances, marking a 12% increase from the previous year.
Conclusion
The PayNow-UPI linkage has not only reduced the cost of remittances for the Indian diaspora in Singapore but has also paved the way for a more efficient and cost-effective cross-border fund transfer system. The collaboration between regulatory authorities, financial institutions, and payment systems has played a pivotal role in revolutionizing the landscape of cross-border remittances.
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