To enforce India and Singapore to link their Fast Payment Systems – Unified Payments Interface and Pay Now, The Reserve Bank of India (RBI) and the Monetary Authority of Singapore (MAS) announced a project to link their respective fast payment systems.

The linkage is targeted for operation by July 2022. The details are available in RBI communication vide September 14, 2021.

Now it is our privilege to learn the details of above fast payment systems.

CBIC cannot cheat assessee by manipulative interpretation -Part II

Why this agreement and what is the main reason?

  • It is a faster infrastructure development in cross border payments between Singapore and India who have huge trade transactions among themselves.
  • This arrangement closely follows G20s financial inclusion priorities of faster, transparent, and cheaper cross-border transactions.
  • Also, it claims its lineage from the efforts of NPCI International Private Limited (NIPL) and Network for Electronic Transfers (NETS) to foster cross-border interoperability of payments.
  • One can easily refer Payment Systems vision document 2019-21 issued earlier in connection with inbound remittances issued by RBI. (referenced at end)

We need to learn about UPI and Pay Now for further deeper understanding.

What is PayNow?

PayNow is the fast payment system of Singapore which enables peer-to-peer funds transfer service, available to retail customers through participating banks

Then, what is United 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 (VPA) created by the customer. It eliminates the remitter to give bank account details and would be free from frauds. Obviously, it supports Person to Person and Person to Merchant payments and enables receipt or sending of money.

The communication of RBI extensively refers to various action points by RBI for implementing the above new developments.

RBI published ‘Payments and settlement systems in India: Vision 2019-2021’ on May 15, 2019 with its core theme of ‘Empowering Exceptional (E)payment Experience’ aims at empowering every Indian with access to a bouquet of e-payment options that is safe, secure, convenient, quick, and affordable.

What does it aim to achieve?

Formalized with the views of all stakeholders, and guidance of the Board for Payment and Settlement Systems (BPSS), it envisages to achieve a ‘highly digital’ and ‘cash-lite’ society through the goal posts of Competition, Cost effectiveness, Convenience and Confidence (4Cs).

Let me quote from the text to get an introduction.

‘With concerted efforts and involvement of all stake holders, the Payment Systems Vision 2021, with its 36 specific action points and 12 specific outcomes, aspires to (a) enhance Customer experience, including robust grievance redressal; (b) empower payment System Operators and Service Providers; (c) enable the payments Eco-system and Infrastructure; (d) put in place Forward-looking Regulations; and (e) undertake Risk-focused Supervision. The ‘no-compromise’

During my link with banks over nearly 4 decades, I have not come across any technological advances to make remittance more pleasant than the proposed RBI venture. This sets us among the most developed, and technologically advanced to serve a common man.

To a relevant question on 36 specific action points and 12 specific outcomes, the following discussion may enlighten us.

Some of the action points————(from RBI website)

(i) Further decrease in the share of paper-based clearing as a percentage of retail payments, particularly in terms of number of paper instruments processed.

(ii) Accelerated growth in individual retail electronic payment systems, both in terms of number of transactions and increased availability.

(iii) Measurably, the digital payment transaction turnover vis-à-vis GDP (at market prices-current price) is expected to further increase to 10.37 in 2019, 12.29 in 2020 and 14.80 in 2021.

(iv) Increase in use of digital modes of payment for purchase of goods and services through increase in debit card transactions at PoS

(v) Usage of debit cards at PoS transactions is expected to be at least 44% of total debit card transactions (at PoS + ATM). In value terms it is 15.2 per cent in 2018-19 (5.2 per cent in 2014-15) which is expected to be 22% by end 2021.

(vi) Increased deployment of card acceptance infrastructure across the country.

(vii)The enhanced availability of PoS infrastructure is expected to reduced demand for cash and thus over time achieve reduction in Cash in Circulation (CIC) as a percentage of GDP.

(viii) Further facilitation of mobile based payment transactions as gauged on basis of the registered customer base (expected increase of 50% considering the base effect).

(ix) Enhanced usage of electronic payment systems.

(x) Security of systems and customer centricity as reflected by: Decrease in Technical Declines reported across various payment systems by 10% year-on-year, Reduction in Business Declines reported across various payment systems by 5% year-on-year, Improvement in Turn Around Time (TAT) for resolution of customer complaints by PSOs.

(xi) FTS [Fraud to Sales (Fraud value / Sales value) x 10000] count for payment systems is expected to be less than 10 bps for most of the payment systems.

(xii) Enhanced healthy competition in the payments space and establishment of new PSOs during the Vision period is envisaged.

Let us also look at some specific initiatives out of 36 identified.

For customers, affordable inclusive services, harmonizing turn around time for solving customer complaints, helpline 24×7, creating awareness, conducting customer awareness surveys, internal ombudsman by payment system operators, review of corridors, and charges for inward remittances.

For system operators and service providers: self- regulatory organization, innovation through competition, feature phone- based payment services, off-line payment solutions, USSD based payment services, national settlement services.

Eco-system and services: availability of retail payment services, global outreach payment systems, widen use, scope, and reach of domestic cards, use of one system in others and establish capabilities for the same, use coverage of check truncation system.

Regulation: innovation in regulatory sandbox, system capacity and scalability, contactless payments, review of members, use of LEI large value payments, use of DLT services for digital payment services, E-Mandates, security aspects, regulation of payment gateway service providers, inter-regulatory and intra regulatory co-ordination.

What about risk- based supervision?

Responsibility to maintain integrity of systems, third party risk management, framework for collection of fraud data, drafting a system to check resilience of the system, and bench marking of payment systems.


It is a privilege to know that the remittance through proper channels/approved vendors will take seconds and at the cheapest and safest means. India is entering the untrodden paths of the world for massive use of millions of transactions at unknown boundaries to facilitate merging of Indian economy among the best in the world. The evolution of proper systems, operators, and evolution of the safest features is the regulatory area of RBI and the concerned authorities from Singapore. After its usage, India will enlarge its usage of these fastest payment services for enlarging its trillion economy.

All activities to serve the poorest of the poor of the nation only. Any one with the technological savvy should refer to the detailed information narrated by RBI and inform them of their views to upgrade the scale, if possible.



Disclaimer: The contents of this article are for information purposes only and do not constitute an advice or a legal opinion and are personal views of the author. It is based upon relevant law and/or facts available at that point of time and prepared with due accuracy & reliability. Readers are requested to check and refer relevant provisions of statute, latest judicial pronouncements, circulars, clarifications etc. before acting because of the above write up. The possibility of other views on the subject matter cannot be ruled out. By use of the said information, you agree that Author/Tax Guru is not responsible or liable in any manner for the authenticity, accuracy, completeness, errors, or any kind of omissions in this piece of information for any action taken thereof. This is not any kind of advertisement or solicitation of work by a professional.

Author Bio

Qualification: Post Graduate
Company: subramanian natarajan cpa firm
Location: NEW DELHI, Delhi, India
Member Since: 09 May 2017 | Total Posts: 183
A banker with 27 years of experience, a CPA from USA with specialization in US taxation, individual, partnership, S corporation or LLC taxation etc View Full Profile

My Published Posts

More Under Fema / RBI

Leave a Comment

Your email address will not be published. Required fields are marked *

Search Posts by Date

October 2021