UPI–PayNow connects two domestic networks, one corridor at a time
Linking UPI and PayNow simplified remittances between India and Singapore. Bank access, permitted purposes and currency presentation still shaped the service customers could use.
On 21 February 2023, India and Singapore launched a link between UPI and PayNow. Eligible users could send money across the border using familiar account identifiers. The Reserve Bank of India's launch FAQ said a transaction could be completed within a minute. The system joined two domestic payment networks while retaining rules about participating institutions, transaction purposes and access.
For payment businesses, the appeal was a simpler transfer experience for families. The bilateral link had a narrower scope than a universal international checkout, however. A viable service depended on knowing which customers could send to which recipients, through which institution, and for what purpose. Those details defined the customers a new product could serve.
A small set of institutions defined the first market
RBI named State Bank of India, Indian Overseas Bank, Indian Bank and ICICI Bank for both inward and outward remittances. Axis Bank and DBS India initially supported inward remittances. On the Singapore side, DBS Singapore and non-bank financial institution Liquid Group participated. An application offering the service needed to show which banks could send and receive. An account at a bank offering UPI was not automatically eligible.
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| Comparison | Send to Singapore | Receive from Singapore |
|---|---|---|
| State Bank of India; Indian Overseas Bank | Supported | Supported |
| Indian Bank; ICICI Bank | Supported | Supported |
| Axis Bank; DBS India | Not included in the initial sending group | Supported |
RBI's initial participation list. Availability also depended on participating institutions' interfaces and phased app updates.
Access also depended on the customer interface. RBI's FAQ listed specific banking apps and internet banking services, said updates would roll out in phases, and required users to update their applications. This was a distribution problem as much as a network connection. A startup measuring launch conversion needed to distinguish an ineligible account or unavailable app version from a customer who simply did not want the service.
The first use case was personal remittance
RBI's FAQ allowed personal remittances for maintenance of relatives abroad and gifts. Indian outward transfers remained subject to the Liberalised Remittance Scheme. These conditions materially narrowed the initial service. A payroll vendor, marketplace or startup handling business payments still needed to establish whether its transaction category was supported.
Singapore Prime Minister Lee Hsien Loong's launch speech described broader benefits for businesses and individuals and referred to progressively adding users and use cases. Expansion remained a prospect. Participating institutions' rules and permitted purposes defined the service customers could use, so a business planning for wider access first needed to be viable within that scope.
A familiar identifier still needs a reliable destination
The RBI release described transfers from bank accounts or wallets using a UPI ID, mobile number or virtual payment address. Its FAQ added requirements that needed to be clear to customers. Indian recipients initially needed a UPI ID registered with the bank holding their account. Participating Indian apps also allowed users to opt in or out of receiving remittances from Singapore.
A sender might know a recipient's usual UPI address without knowing whether it worked for this corridor. The application needed to explain the required identifier and receiving consent before asking the sender to commit. Clear eligibility checks could prevent repeated attempts and support contacts, making the service easier to use while explaining its limits.
Two currency amounts are part of the transaction
At launch, RBI said an Indian user could remit up to INR 60,000 in a day, equivalent to approximately SGD 1,000. It also said the system would dynamically calculate and display the amount in both currencies. The approximate equivalent in Singapore dollars was not a fixed exchange rate. It also did not establish that every Singapore participant offered identical limits.
For a remittance product, speed and currency presentation belonged together. The sender needed to understand the amount debited and the amount expected by the recipient. A startup comparing its offering with alternatives would need to examine the actual rate, charges and customer journey for the same transfer. The launch announcement established a capability, but it did not establish universal pricing or a measured saving for every customer.
The corridor was larger than the reachable launch audience
Lee's speech put cross-border retail payments and remittances between the countries at more than US$1 billion annually. That figure described the combined category, not remittances alone and not volume already flowing through the new link. It offered context for why the corridor mattered while leaving a startup's addressable launch market to be established separately.
The speech also described the link as India's first international connection between instant payment systems and Singapore's second. Existing domestic adoption could help users understand the interaction, but international reach still had to be built corridor by corridor. Customer demand, local account access and permission to serve the intended use case all affected whether another connection could support a commercial product.
Reliability determines repeat use
A useful business could emerge around helping eligible customers complete recurring remittances with fewer mistakes. That would require accurate account eligibility, comprehensible currency amounts, a reliable transaction record and support that understood both ends of the journey. Each capability could be assessed with completed transfers and repeat use rather than inferred from the popularity of UPI or PayNow.
The launch demonstrated that domestic instant payment systems could be linked while banks and non-bank institutions continued to manage customer relationships. Investors could assess that operating model through services working within the corridor's rules. Completing transfers reliably and earning repeat use would determine whether the connection could sustain a business.
Investment implications
- A corridor's launch coverage depends on direction, institution and permitted purpose. Total domestic network users are a different measure.
- Payment software can help customers understand eligibility, currency amounts and transfer status.
Sources
- Honorable Prime Ministers of India and Singapore Launch Real-time Payment Systems Linkage between the Two Countries (opens in a new tab)
Reserve Bank of India
- UPI-PayNow Linkage: Frequently Asked Questions (opens in a new tab)
Reserve Bank of India
- PM Lee Hsien Loong at the Launch of the PayNow-UPI Linkage (Feb 2023) (opens in a new tab)
Prime Minister's Office Singapore
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