India, Singapore announce linking of UPI and PayNow fast payment systems

• The RBI and the Monetary Authority of Singapore have announced a project to link their respective fast payment systems, Unified Payments Interface and PayNow. The linkage is targeted for operationalisation by July 2022.

• PayNow is the fast payment system of Singapore which enables peer-to-peer funds transfer service, available to retail customers through participating banks and Non-Bank Financial Institutions in Singapore.

• The UPI-PayNow linkage will enable users of each of the two fast payment systems to make instant, low-cost fund transfers on a reciprocal basis without a need to get onboarded onto the other payment system.

• The UPI-PayNow linkage is a significant milestone in the development of infrastructure for cross-border payments between India and Singapore, and closely aligns with the G20’s financial inclusion priorities of driving faster, cheaper and more transparent cross-border payments.

About UPI:

• Unified Payments Interface (UPI) is India’s mobile based, ‘fast payment’ system that facilitates customers to make round the clock payments instantly using a Virtual Payment Address created by the customer.

• This eliminates the risk of sharing bank account details by the remitter.

• UPI supports both Person to Person and Person to Merchant payments as also it enables a user to send or receive money.

• It was developed by the National Payments Corporation of India (NPCI), an RBI regulated entity.

How is it unique?

• Immediate money transfer through mobile device round the clock 24*7 and 365 days.

• Single mobile application for accessing different bank accounts.

• Single Click 2 Factor Authentication – Aligned with the Regulatory guidelines, yet provides for a very strong feature of seamless single click payment.

• Virtual address of the customer for Pull and Push provides for incremental security with the customer not required to enter the details such as Card no, Account number; IFSC etc.

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Mains Paper 3: Economy

Prelims level: Unified Payments Interface

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