INDIA & SINGAPORE link their digital payment system

India and Singapore have made a major move towards disrupting cross-border fund transfers, linking their digital payments systems, UPI and PayNow. The collaboration between the two systems went live on Tuesday, enabling instant and low-cost fund transfers between the two nations. The linkage aims to reduce the more than $1 billion each year that flows between the two countries and facilitate trade and people-to-people links.

The collaboration involves eight banks, including DBS, Liquid Group, Axis Bank, and State Bank of India. Indian users can currently remit up to 1,000 Singapore dollars per day, according to the Reserve Bank of India. The PayNow-UPI linkage is India’s first cross-border, real-time system linkage and Singapore’s second. It’s also the world’s first such linkage to feature cloud-based infrastructure and participation by non-bank financial institutions.

UPI is a popular payments infrastructure in India, with more than 8 billion transactions processed each month. The system has been adopted by scores of local and global firms, including Walmart, Google, and Facebook. Similarly, Singapore’s PayNow offers interoperability between banks and payments apps, allowing users to make transactions to those on other apps.

The global remittance market is ripe for disruption, with fees averaging around 6.5% for sending money. According to Citi, nearly 250 million people across the world send over $500 billion in cross-border remittances annually.

India plans to use its ongoing presidency of the G20 forum to make presentations to other nations about its digital infrastructure. As the PayNow and UPI linkage progresses, it will grow in utility, contributing to facilitating trade and people-to-people links.