India and Singapore have linked their digital payments systems, UPI and PayNow, to enable instant and low-cost fund transfers in a major push to disrupt the cross-border flow of money between the two nations that amounts to more than $1 billion each year.
What is UPI?
Unified Payments Interface (UPI) is a real-time payment system developed by the National Payments Corporation of India (NPCI) that allows users to send and receive money directly from their bank accounts using a mobile device. Here's how UPI works:
Download UPI-enabled mobile application: Users need to download a UPI-enabled mobile application from their respective bank or any other third-party applications that support UPI.
Register: Users need to register with their mobile number and bank account details to create a UPI ID.
Link Bank Account: After registration, users need to link their bank accounts with the UPI application.
Set PIN: Users need to set a 4-6 digit UPI PIN to authenticate transactions.
Send and receive money: Users can send and receive money directly from their bank accounts by using the UPI ID or mobile number of the recipient.
UPI has gained popularity due to its many benefits, some of which include:
Convenience: UPI allows users to transfer money instantly, without the need for bank account details or IFSC codes.
Security: UPI uses two-factor authentication, which makes it secure and reduces the risk of fraud.
Cost-effectiveness: UPI transactions are free or have very minimal charges, which makes it a cost-effective payment option.
Interoperability: UPI is interoperable, which means that users can make transactions across different banks and payment platforms.
User-friendly: UPI is user-friendly and can be easily accessed through mobile applications.
Overall, the simplicity, security, and cost-effectiveness of UPI have contributed to its popularity in India and internationally.