EEkaLore earlier post on international payments described the tie-up between Singapore Bank and India’s new UPI standard. This post describes the wider implication. You can find the earlier post here.
The advantages for Indian overseas participants are significant. Singapore banks will waive all transaction fees for remittances to India. 400,000 Indian workers in Singapore and Indian workers who bank with institutions like DBS-Singapore and non-bank Liquid Group stand to gain from this waiver. Indian institutions, State Bank of India, Indian Overseas Bank, Indian Bank, and ICICI Bank will support transfers to and from Singapore. The expectation is for additional institutions to join the initiative.
Expectations of additional institutions are also an objective leading to advantages for additional countries and financial enterprises. The use of UPI as a source and destination funds transfer/payments facility is an important tool in gaining “unbanked” consumers in overseas markets. The reach of remittance deliveries across large population demographics and geographies is also a key benefit to establishing transactional, then bank, then services, relationships for Indian institutions to expand domestic services.
Low cost funds transfers, if paired with economical logistics capabilities, as China has done with the USA, enable business and commercial opportunities to directly address consumer markets, stimulating even small and medium businesses. The transaction volume, monetary expertise, and financial applications systems experience brought to Indian financial institutions also benefit a Dynamic India. It seems likely for Indian banks, mobile financial services, commercial enterprises, and supportive innovative Internet markets to build on this initiative.
Contrast this initiative with Paytm’s situation explored in this previous post – Paytm Changes Ownership
If you’d like to see more pieces about Dynamic India’s opportunities and challenges you can find them here at www.ekalore.com/india-business
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