Safe across borders: On Unified Payments Interface-PayNow link

Source: This post is based on the article “Safe across borders”, published in The Hindu on 24^th feb. 2023.

Syllabus Topic: GS Paper 3, Money and Banking.

News: Recently, India and Singapore enabled faster transfer of remittances between both countries by enabling integration of Unified Payments Interface(UPI) with Singapore’s PayNow.

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The daily transaction limit is set at ₹60,000 or about SGD 1,000.

Significance of Cross-border integration of Payment Interfaces

1. It is the beginning of real-time cross-border person-to-person money transfers.
2. Singapore is home to a sizeable Indian diaspora as well as tens of thousands of migrant workers employed in Singapore.
3. It enables individuals to quickly and safely remit money. It will save them the hassle of running to bank branch or a wire transfer facility’s outlet or costly hawala transactions.
4. It will eliminate the use of external settlement currency like US Dollar.
5. Singapore has already established payment settlement facility with Thailand in 2021. It is also the member of larger five-member initiative among the central banks of Southeast Asian economies, to connect their domestic digital payment systems. India could become a part of this initiative.
6. Besides boost to regional trade and tourism, such a network would help India to further formalise the flow of inbound remittances.