February 22, 2023
SINGAPORE – PayNow users who are customers of certain financial institutions can now use the real-time fund transfer service to send money to others in India instantly.
This comes as a linkage between PayNow and its Indian counterpart Unified Payments Interface (UPI) was launched on Tuesday, as part of wider efforts to enhance the infrastructure for cross-border payments.
The feature, which was first announced in September 2021, will be made available to certain customers of Singapore’s largest bank DBS and fintech company Liquid Group under a phased approach.
These companies will progressively increase the number of eligible users and transaction limits until the end of March.
For a start, selected DBS and POSB customers will be able to use the PayNow-UPI linkage to transfer up to $200 per transaction, capped at $500 a day.
The service will be extended by March 31 to all of the bank’s customers, who will be able to transfer funds of up to $1,000 a day.
Customers of all participating Indian banks – Axis Bank, DBS India, ICICI Bank, Indian Bank, Indian Overseas Bank and State Bank of India – will be able to receive funds through the service from the outset.
However, the sending of funds is for now limited to customers of ICICI Bank, Indian Bank, Indian Overseas Bank and State Bank of India, with the scope to be gradually expanded.
“The linkage provides customers with a safe, simple and cost-effective way to make cross-border fund transfers,” the Monetary Authority of Singapore (MAS) said on Tuesday.
Customers of the participating financial institutions can send and receive funds between bank accounts and e-wallets using just their mobile number, UPI identity or Virtual Payment Address (VPA).
Non-bank financial institutions that are connected directly to PayNow and Fast rely on VPAs to send and receive real-time payments from users of other e-wallets or mobile banking applications.
The PayNow-UPI tie-up is the first of its kind to use scalable cloud-based infrastructure that can accommodate future increases in the volume of remittance traffic. It is also the first linkage to feature a non-bank financial institution as a participant.
Prime Minister Lee Hsien Loong, who officiated at the launch via live streaming at the MAS Building together with his Indian counterpart Narendra Modi, noted that cross-border retail payments and remittances between Singapore and India amount to over US$1 billion (S$1.3 billion) annually.
The PayNow-UPI linkage builds on a partnership in 2018 between Singapore’s Nets and India’s NPCI International Payments to allow card and QR code payments between both countries, he noted.
“As we progressively add more users and use cases, the PayNow-UPI linkage will grow in utility and contribute more to facilitating our trade and people-to-people links,” he said.
Mr Modi said the people who will especially benefit from the partnership include migrant workers, professionals, students and their families.
“Fintech is a sector that connects people to each other. Under normal circumstances, the scope of this is limited to the boundaries of one country. However, the launch today is a beginning of a new chapter in cross-border fintech connectivity,” he said, noting that the linkage is a first for India’s cross-border real-time payment system.
MAS managing director Ravi Menon and Reserve Bank of India governor Shaktikanta Das showed at the launch on Tuesday that they were able to transfer funds to each other within seconds across Singapore and India.
DBS’ Singapore country head Shee Tse Koon noted that India is one of DBS’ biggest markets for overseas remittances.
“(The linkage) is a particularly welcome addition to our wide-ranging suite of payment solutions for small and medium-sized enterprises, retail customers and especially migrant workers, who now have another convenient option to send money to their loved ones back home,” he said.
The total value of remittances made by migrant workers grew 25 per cent in 2022, compared with 2021, on the bank’s DBS Remit service that allows users to send money overseas without incurring a transfer fee.
The number of new customers who remitted funds to India via DBS Remit also jumped 63 per cent over the same period.
The Straits Times understands that foreign exchange (FX) rates for DBS PayNow users of the linkage will be the same as those offered on the DBS Remit service.
Ms Angela Lim, executive vice-president for product development at Liquid Group, said the new linkage will help users avoid high fees and long waiting times often seen with existing cross-border fund transfer services.
These issues pose challenges for customers like lower-income migrant workers or students with limited budgets, she said.
Mr Sarthak Shreya, 29, a senior solutions architect, usually sends money via DBS Remit to his mother’s savings account in India, and to pay his cousin’s school fees.
“It is fairly easy to use and usually offers a good FX conversion rate… However, transferring money to an existing account takes a lot of clicks, and it could also take a business day or two to reach the recipient,” he said, adding that PayNow would make it easier to transfer small sums of money.
Singapore’s other real-time payment partnerships
.Singapore’s PayNow service linked up with Thailand’s PromptPay in April 2021 – a world first for cross-border fast payments. The number of transactions made between both sides has jumped from 12,000 that month to 51,000 currently, while the value has surged from $3 million to $14 million.
.Consumers in Singapore and Malaysia will be able to transfer funds instantly when PayNow is linked with Malaysia’s DuitNow. The exact date of the launch, which was initially slated for the fourth quarter of 2022, has not been announced. Customers of Singapore cross-border payments firm Instarem can already send money to Malaysia in real time via DuitNow.