India, Singapore eye pan-Asean rollout of digital payment links

India and Singapore have held discussions on framing rules and regulations and enhancing inter-operability and cybersecurity so that the existing link between their digital payments systems can be expanded to other Southeast Asian countries, people familiar with the matter said.
Agreements and understandings reached during Prime Minister Narendra Modi’s recent visit to Singapore are also expected to lead to further investments of about $60 billion into India over the next three years, the people said on condition of anonymity. Total investments into India from Singapore since 2000 are worth nearly $160 billion.
The real-time, cross-border linking of India’s Unified Payments Interface (UPI) and Singapore’s PayNow was done in February 2023 and the two sides are currently up to about 3,000 transactions a month. Following this success, the two sides are looking to roll out similar links across the Asean region, the people said.
This issue figured in discussions during the India-Singapore Ministerial Roundtable (ISMR) in August and Modi’s subsequent visit to Singapore in September, they said. Among countries that are possible candidates for such a rollout are Malaysia and Thailand. However, there are also Asean members that are closely embedded with China’s economy and digital payments systems that may be unwilling to cooperate in this field, they said.
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One of the memorandums of understanding (MoUs) signed during Modi’s visit focuses on cooperation in digital technology to encourage greater interoperability between the digital economies of India and Singapore and build on earlier work, such as the UPI-PayNow linkage. This MoU also covers governance frameworks for data flows, rules for data protection, and enhancing cybersecurity.
Following the ISMR meeting on August 26, Singapore’s foreign minister Vivian Balakrishnan told reporters the UPI-PayNow linkage has the “potential to grow into a regional instant payment system”. This, he noted, is because of Singapore’s interconnectivity with Thailand and Malaysia.
There were discussions with India on standards, technology and cybersecurity to “turbo-charge” economic integration between India and the region, Balakrishnan said. Once rules, regulations and interoperability are in place, other countries wanting to connect to the network won’t have to “create customised interconnectivities” as they can plug into a standardised interface in a safe, secure and efficient manner, he said.
The people cited above said agreements and understandings during Modi’s visit are expected to lead to fresh investments of $60 billion over the next three years, with renewables, especially green hydrogen and ammonia, leading the way because of their export potential. Singapore’s investors have also evinced interest in India’s new industrial parks, they said.
Semiconductors, the focus of another MoU signed during Modi’s visit, is another field with potential. Singapore contributes around 10% of global semiconductor output, 20% of semiconductor equipment production and 5% of global wafer fabrication capacity. The city state also has key players in all three segments of the semiconductor value chain – chip design, assembly and testing, and wafer fabrication.
“There is a lot of synergy between what India wants, and what Singapore can do,” one of the people cited above said. “India is only the second country, after Australia, with which Singapore has upgraded its relations to a comprehensive strategic partnership.”