Digital India Initiatives

India, Singapore launch UPI-PayNow Linkage


From UPSC perspective, the following things are important :

Prelims level: Unified Payment Interface (UPI)

Mains level: UPI integration with global payment systems


India’s Unified Payments Interface (UPI) and Singapore’s PayNow were officially connected to allow a “real-time payment linkage”.

What are UPI and PayNow?

[A] Unified Payments Interface (UPI)

  • UPI is India’s mobile-based fast payment system, which facilitates customers to make round-the-clock payments instantly, using a Virtual Payment Address (VPA) created by the customer.
  • It eliminates the risk of sharing bank account details by the remitter.
  • UPI supports both Person-to-Person (P2P) and Person-to-Merchant (P2M) payments and it also enables a user to send or receive money.

[B] PayNow

  • It is a fast payment system in Singapore.
  • It enables peer-to-peer funds transfer service, available to retail customers through participating banks and Non-Bank Financial Institutions (NFIs) in Singapore.
  • It allows users to send and receive instant funds from one bank or e-wallet account to another in Singapore by using just their mobile number, Singapore National Registration Identity Card (NRIC)/Foreign Identification Number (FIN), or VPA.

What is the UPI-PayNow linkage?

  • Cross-border retail payments are generally less transparent and more expensive than domestic transactions.
  • The project to link both the fast payment systems was initiated in September 2021 to facilitate faster, more efficient and transparent cross-border transactions relating to trade, travel and remittances between the two countries.

Significance of the integration

  • Enhanced cross-border transactions: The integration will enable easier cross-border transactions between India and Singapore, reducing the need for intermediaries and associated costs.
  • Easier remittances: The integration will make it easier for Indian workers in Singapore to send money back home to their families.
  • Boost to trade and investment: The integration will facilitate smoother transactions between businesses in the two countries, potentially increasing trade and investment.
  • Strengthening of diplomatic ties: The integration is expected to improve diplomatic ties between India and Singapore.

How the integration works?

  • The integration is made possible through the use of standardized QR codes.
  • The QR codes will allow users to transfer funds between the two systems in real-time, without the need for intermediaries.

Implications for the future

  • More integrations: The success of the UPI-PayNow integration could pave the way for similar integrations between other countries.
  • Increased use of digital payments: The integration is expected to encourage the adoption of digital payments in both India and Singapore, potentially reducing the use of cash.


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