News

Published: Feb 25, 2023
Updated: Feb 25, 2023

India's UPI transactions volume reflects ease and security, says PM Modi; digital transactions could surpass cash

Indian Prime Minister Narendra Modi praised the Unified Payments Interface (UPI) for handling more than 74 billion transactions in 2022, which demonstrates the level of security the real-time payment system provides. He spoke at an event announcing the launch of a person-to-person payment facility between India and Singapore, which links UPI with PayNow. The new linkage allows users to transfer funds using only their UPI id, mobile number, or Virtual Payment Address (VPA), and India's digital wallet transactions could soon overtake cash transactions, according to experts.

More banks to be roped in soon

The UPI-PayNow linkage is a result of collaboration between the Reserve Bank of India, the Monetary Authority of Singapore, the NPCI International Payments Limited, Banking Computer Services Pte Ltd, and participating banks as well as non-bank financial institutions. At the start, only a few banks, including State Bank of India, Indian Overseas Bank, Indian Bank, and ICICI Bank, will facilitate the remittances, both inward and outward. However, the RBI said more banks would be roped in over time.

Goal aligns with financial inclusion priorities of G20

The UPI processed over 74 billion transactions worth Rs 125.94 trillion in 2022, and in 2021, it processed over 38 billion transactions worth Rs 71.54 trillion. The platform crossed its first billion transactions in October 2019, almost three years after its launch in 2016.

At the time of making the transaction, the system will dynamically calculate and display the amount in both currencies for convenience. Initially, Indian users can remit up to Rs 60,000 in a day (equivalent to around SGD 1,000). Users in Singapore can avail the service through DBS-Singapore and Liquid Group, a non-bank financial institution. The linkage, which is aligned with the financial inclusion priorities of the G20, represents a key milestone in the development of infrastructure for cross-border payments between India and Singapore.

On way to "Cashless Economy"

Accordingly, the UPI's ease of use and high security have made it a preferred choice among users for transactions. With the new UPI-PayNow linkage, both India and Singapore can benefit from secure and real-time cross-border payments, which could lead to an increase in digital transactions and a potential shift away from cash.