There are a multitude of initiatives underway across various global markets about improving cross-border payments, including P2P, C2B, and B2B use cases. We have kept up with developments on these pages and also in member research. Where do real-time remittances come in?
In this particular referenced posting from Reuters we have an announcement that Singapore and India have created a link between their respective sovereign real-time payments schemes (India’s UPI and Singapore’s PayNow), which will allow for instant mobile phone funds transfers between the two countries. According to Reuters, Singapore has already established something similar with Thailand and is working on a link with Malaysia as well. The article indicates that current retail payments and remittances between the two countries are $1 billion per annum, per Singapore’s Prime Minister Lee Hsien Loong. Some readers will know that India is one of the largest receiving countries for remittances.
This is in line with the G20 initiative going back to 2014 for improving remittance flows. Part of the responsibility of participating countries is to issue periodic reports on sovereign progress. As a result of this G20 focus, the World Bank set up partnerships with multiple countries in both the public and private sectors and provides financial and technical assistance for improving access to millions of unbanked individuals through the International Finance Corporation.
More recently there have been additional focal points for improving cross-border payments, including an effort being shepherded by the Financial Stability Board (a G20 sponsored organization) in conjunction with the Bank of International Settlements (BIS) to execute improvements through a Roadmap for Enhancing Cross-Border Payments. The article indicates that “to begin with, State Bank of India, Indian Overseas Bank, Indian Bank, and ICICI Bank will facilitate both inward and outward remittances while Axis Bank and DBS India will facilitate inward remittances.”
Meanwhile in Singapore, it will be DBS-Singapore and Liquid Group, a non-bank financial institution. The initial limit for an individual in India will be 60,000 rupees, or about $725.
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Javelin Strategy & Research.