The Reserve Bank of India (RBI) is working to establish Unified Payments Interface (UPI) as a channel for making cross-border remittances. In its recently-released annual report for FY22, the central bank said the enablement will help reduce the cost of remittance transactions.
The first such linkage between UPI and another country’s fast payments system was the link with Singapore’s PayNow, activated in September 2021. “While the efforts with various countries are at various stages, the interlinking of UPI with PayNow has been formally announced and is expected to be operationalised in the second half of 2022,” the report said.
The interlinking will further anchor trade, travel and remittance flows between the two countries and lower the cost of cross-border remittances. It would also serve as an example of interlinking of respective fast payment systems to achieve instant remittances in a cost-effective manner, the RBI said.
The UPI-PayNow linkage will enable users of the two systems to make instant fund transfers without the need to get on-boarded onto the other system. “In other words, a user of UPI does not require to be a part of PayNow system to be able to transfer funds to a PayNow user in Singapore and vice versa,” the RBI said.
The linkage builds upon the earlier efforts of NPCI International Payments (NIPL) and Network for Electronic Transfers (NETS) of Singapore to facilitate QR code-based payments through UPI in the country.
Mandar Agashe, founder and MD, Sarvatra Technologies, said that India should explore similar partnerships to deepen collaborations with overseas partners, especially with countries where a large working population of Indians lives. “Like in UPI, such tech integrations will go a long way in building robust payment solutions that can be taken to global markets, while collaborating with local payment system operators,” he said.