Singapore and India launched a real-time link on Tuesday (Feb 21) to facilitate cross-border fund transfers between bank accounts or e-wallets via mobile phones.
This is made possible by a collaboration between Singapore's PayNow service and India's Unified Payments Interface (UPI).
Customers of participating financial institutions can transfer funds simply by providing their mobile phone number, UPI identity, or Virtual Payment Address.
"The linkage provides customers with a safe, simple and cost-effective way to make cross-border fund transfers," said the Monetary Authority of Singapore (MAS) in a media release.
In Singapore, the service will be made available in stages to DBS and Liquid Group customers.
To begin, selected DBS customers will be able to transfer funds of up to S$200 per transaction, with a daily limit of S$500. By March 31, all DBS customers will be able to use the service to transfer funds up to S$1,000.
To begin, four banks in India will facilitate both inward and outward remittances: State Bank of India, Indian Overseas Bank, Indian Bank, and ICICI Bank, while Axis Bank and DBS India will facilitate inward remittances.
A user in India can remit up to 60,000 Indian rupees (US$725) a day for a start.
The virtual event was officiated by Singapore Prime Minister Lee Hsien Loong and his Indian counterpart Narendra Modi.
According to Mr Lee, cross-border retail payments and remittances between India and Singapore currently total more than US$1 billion per year.
"The PayNow-UPI linkage will offer cheaper, faster and safer cross-border retail payments and remittances, for businesses and individuals alike, directly between bank accounts or e-wallet," he added.
"As we progressively add more users and use cases, the PayNow-UPI linkage will grow in utility and contribute more to facilitating our trade and our people-to-people links."
Mr Modi noted that the linkage will help migrant workers, professionals, students and their families.
"This will enable people from both countries to immediately and at low-cost transfer funds (by) just using their mobile phones," he added.
As per MAS, the PayNow-UPI linkage is the world's first real-time payment systems linkage to use a scalable cloud-based infrastructure capable of accommodating future increases in remittance traffic volume.
It will review and gradually increase the number of participating financial institutions in collaboration with the Reserve Bank of India (RBI).
"The PayNow-UPI linkage is the result of extensive collaboration between MAS, RBI, payment system operators in both countries, payment scheme owners, and participating banks and non-bank financial institutions," MAS said.
"It is a significant milestone in improving cross-border payment infrastructure and supports India's G20 presidency priorities to improve the cost, speed, access, and transparency of cross-border payments."