Linking of Unified Payments Interface (UPI) and PayNow

Linking of Unified Payments Interface (UPI) and PayNow

Part of: Prelims and GS III – Economy

Context The Reserve Bank of India (RBI) and the Monetary Authority of Singapore (MAS) announced a project to link their respective fast payment systems — Unified Payments Interface (UPI) and PayNow. 

• PayNow is the fast payment system of Singapore that enables peer-to-peer fund-transfer service.
• The linkage is targeted to be operationalised by July 2022.
• The UPI-PayNow linkage will enable users of each of the two fast-payment systems to make instant, low-cost, cross-border fund transfers on a reciprocal basis without a need to get on boarded onto the other payment system.

What is Unified Payments Interface (UPI)?

• UPI is a payment system launched in April 2016 by National Payments Corporation of India(NPCI), that allows money transfer between any two bank accounts by using a smartphone.
• It facilitates customers to make round-the-clock payments instantly using a virtual payment address created by the customer.
• UPI allows a customer to pay directly from a bank account to different merchants, both online and offline, without the hassle of typing card or bank details.
• It also caters to the “Peer to Peer” collect request which can be scheduled and paid as per requirement and convenience.
• More than 100 million UPI QRs have been created in the last 5 years 
• BHIM UPI in 2020-21 has processed 22 billion transactions worth Rs 41 lakh crore.