UPI–PayNow Corridor

The UPI–PayNow Corridor is a cross-border real-time payment linkage connecting India’s Unified Payments Interface (UPI) with Singapore’s PayNow system. It enables instant, low-cost, and secure person-to-person fund transfers between bank accounts in India and Singapore using mobile numbers or virtual payment addresses. As one of the world’s first fully interoperable real-time payment corridors, the UPI–PayNow linkage represents a landmark development in international payments, with significant implications for banking systems, financial services, and the Indian economy.

Background and Genesis of the Corridor

Cross-border remittances have traditionally been characterised by high costs, long settlement times, and complex intermediary chains. Recognising these inefficiencies, India and Singapore pursued a direct linkage between their domestic fast payment systems. The UPI–PayNow Corridor was operationalised through collaboration between the National Payments Corporation of India and the Monetary Authority of Singapore, aligning technical standards and regulatory frameworks.
UPI, India’s real-time retail payment system, and PayNow, Singapore’s instant payment platform, were both designed for interoperability and scalability within their domestic markets. Their linkage reflects a shared policy vision to modernise cross-border payments and support growing economic, trade, and diaspora ties between the two countries.

Regulatory and Institutional Framework

The corridor operates under the regulatory oversight of the Reserve Bank of India and the Monetary Authority of Singapore. These regulators ensure compliance with foreign exchange regulations, anti-money laundering standards, and know-your-customer requirements in both jurisdictions.
On the operational side, NPCI International Payments Limited coordinates the Indian end of the linkage, while Singapore’s payment infrastructure operators manage the PayNow network. Settlement mechanisms are designed to be transparent and efficient, with currency conversion handled through authorised banking channels.

Operational Mechanism of the UPI–PayNow Linkage

Under the UPI–PayNow Corridor, users in India can send money to recipients in Singapore using a UPI-enabled application, while users in Singapore can transfer funds to India using PayNow. Transactions are initiated using simple identifiers such as mobile numbers, eliminating the need for detailed bank account information.
The payment process is near real time, with funds credited almost instantly to the recipient’s bank account in the destination country. Currency conversion is carried out automatically, and transaction details are displayed upfront, improving transparency and user confidence. Despite the cross-border complexity, the user experience mirrors that of a domestic instant payment.

Role in the Banking Sector

For banks in India, the UPI–PayNow Corridor expands the scope of retail banking services into the international domain. Banks can offer faster and more affordable remittance solutions compared to traditional wire transfers or correspondent banking channels. This enhances customer retention, particularly among individuals with cross-border financial needs.
The corridor also reduces operational costs by minimising intermediaries and manual processing. Predictable and faster settlement improves liquidity management and reduces reconciliation burdens for participating banks.

Impact on Financial Services and Remittances

Remittances form a vital component of India’s external financial flows, and the UPI–PayNow linkage offers a transformative alternative for small-value, high-frequency transfers. Financial service providers benefit from improved efficiency, reduced transaction costs, and enhanced transparency.
The corridor supports use cases such as migrant worker remittances, family support payments, education-related transfers, and small business transactions. By digitising and simplifying these flows, it complements existing remittance channels and increases competitive pressure to lower costs across the sector.

Significance for the Indian Economy

At a macroeconomic level, the UPI–PayNow Corridor strengthens India’s integration into the global digital payments ecosystem. Faster and cheaper remittances increase the disposable income of recipient households, supporting consumption and savings. Improved traceability of cross-border transactions also enhances the quality of balance of payments data and policy analysis.
The linkage reinforces India’s position as a provider of advanced digital public infrastructure. By exporting interoperable payment models, India enhances its financial diplomacy and strengthens economic partnerships with key regional and global partners.

Advantages and Economic Benefits

The UPI–PayNow Corridor offers several advantages:

• Speed: Near-instant settlement compared to traditional cross-border transfers.
• Cost Efficiency: Lower fees due to reduced intermediaries.
• Transparency: Clear visibility of exchange rates and transaction status.
• Accessibility: Simple identifiers reduce procedural complexity for users.