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Singapore and India Link Real Time Retail Payment Systems

Singapore and India launched a real time payment link to ease cross-border payments between the two countries. The transfer of funds between the two countries is now possible using India’s Unified Payments Interface (UPI) and Singapore’s PayNow.


The Monetary Authority of Singapore (MAS) and the Reserve Bank of India (RBI) have enabled the linkage of Singapore’s PayNow and India’s Unified Payments Interface (UPI), allowing for financial institutions in Singapore and India to send and receive funds between e-wallets and bank accounts in real time. The system went live in February 2023.

The PayNow-UPI linkage is the world’s first real time payment system linkage that uses scalable cloud-based infrastructure that can accommodate future increases in remittance traffic. It is also the first to feature a non-banking financial institution.

This is India’s first real time overseas payment link and will benefit the country’s remittance market, which hit the US$100 billion mark in 2022 – the first time a single country has reached this number.

MAS has made the PayNow-UPI service available to Singapore customers of Liquid Group (the non-banking financial institution) and DBS Bank, but this will be expanded under a phased approach. For Indian users, State Bank of India, Overseas Bank, Indian Bank, Axis Bank, ICICI Bank, and DBA India will facilitate transactions. This list is also expected to be expanded.

Lowering the cost of remittances

The PayNow-UPI linkage will decrease the cost of remittances for foreign workers residing in Singapore and India as well as providing foreign merchants a more seamless means to receive and make payments. The annual remittance flow between the two countries is estimated at US$1 billion and the new linkage system provides an opportunity to contribute more to trade between both countries – India received an estimated US$100 billion from overseas remittances, the most of any nation.

Singapore has been an important source of foreign investment into India over the last two decades, contributing to some 23 percent of India’s total FDI during this period. Further, a significant number of Indians have moved to well-paid jobs in countries such as Singapore where an estimated 45,000 out of 177,100 Employment Pass (EP) holders in the city state are from India. The EP work permit is issued to expatriates employed as managers, skilled professional, and executives in Singapore.

Real time payment linkages a growing trend in Southeast Asia

Real time payment linkages are fast becoming a growing trend in Southeast Asia with Singapore already establishing cross-border payment links with Malaysia, Indonesia, and Thailand.

The five countries aiming to link their respective real time payment systems are Singapore, Thailand, Malaysia, Indonesia, and the Philippines. A memorandum of understanding was signed between the central banks of the mentioned countries on Cooperation in Regional Payment Connectivity (RPC) in November 2022 in Indonesia.

Going forward, the central banks will aim connect this network to include other clusters in the region before potentially expanding to other countries outside of Southeast Asia. The region’s shared aspiration for connected payment systems will help facilitate trade and investment because of a seamless and more affordable cross-border payments activities.

Further, the initiative will assist in deepening financial inclusion among Southeast Asia’s unbanked and underbanked population. An estimated 50 percent of the region’s population is unbanked and a further 24 percent is estimated to be underbanked.

This has been attributed to the large number of informal businesses and workers employed in the informal sector, who mainly transact using cash and thus lack a formal credit history that would enable them to access formal financial tools.

Bridging this divide will be crucial if Southeast Asia’s digital economy wants to continue on its growth trajectory of reaching a gross merchandise value of between US$600 billion and US$1 trillion by 2030.

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