What are the various electronic payments in India

Electronic payment in India was introduce to provide cost effective, hassle free and quick payment experience in comparison to previously used paper based traditional method. In this article you will learn about various electronic payments prevalent in India.

Electronic payment in India was introduce to provide cost effective, hassle free and quick payment experience in comparison to previously used paper based traditional method. With the motive to bring revolution and speed in transaction of money along with secure and hassle free service for customers, RBI initiated reforms in payment and settlement system to insure faster and efficient flow of funds among various constituents of the financial sector. At present electronic payment and settlement system is working in Indian Banking system. [Image source- By author]

Advantages of Electronic payment

Electronic payment is revolution in the banking system. It is one of the key automation that was introduce in the field of banking. This system proved to be beneficial to both customers and bank. On the part of customer its user friendly, time saving and even cost effective. Elaborated paper work and running around center for payment was tedious job. Now customer can simply sit at there place and on the click of their mouse make the payment quickly and easily. Beside this the cost of this service is just 1 % to the total transaction made and again this is one of the advantage on part of customer. Now coming to the benefits avail by the bank. Bank foremost work is to accept and make payments. And with the introduction of electronic payment system this working is simplified. No over due payment and time lag is service is faced. Secure data and detail payment receipt is available to bank as well as customer. So the incidence of messy and manipulative work is eliminated. Security and secure payment is what both party can experience. So over all electronic payment increase compliance, provide quick, secure and cost effective payment,

Types of Electronic payment in India

RBI has initiating reforms in payment and settlement system to insure faster and efficient flow of funds among variant constituents of the financial sector. For this at present electronic payment and settlement system is working in India banking system. The various form of fund transfer and settlement applicable in India are as follows-
  • NEFT- National electronic fund transfer
  • RTGS- Real time gross settlement
  • EFT- Electronic fund transfer
  • ECS- Electronic clearing service

  • NEFT-National electronic fund transfer

    National electronic fund transfer is one of the most important and prominent system of fund transfer working in India since November, 2005. It is a nation wide system that provides provision to any individual firm, corporate, or any customer to initiate and avail the quick service of transferring fund electronically from any bank branch to any individual, firm or corporate, who must be having an account with any other bank branches working within the country. Even person who don't have any bank account in any bank branches in India can use this NEFT services very easily. All they have to do is to deposit cash at the NEFT enabled branch in India. In NEFT fund is transferred in hourly batches within 9a.m- 7p.m from Monday to Friday and for Saturday timing is from 9a.m to 1p.m. What amount of money can be transferred using NEFT? Well there is no limits has been set neither minimum nor maximum. But normally below 2 lakhs rupees fund is transferred and settled through NEFT. And bank charges a fee for providing this NEFT services to the consumer.

    RTGS- Real time gross settlement

    Real time gross settlement is also a fund transfer system from one bank to another on two basis. One is a "real time" and another is" gross basis". This can be categorized as one of the fastest fund transfer system circulation in the banking channel. What real time stands for? Real time signifies the system being time effective. No waiting period and delayed process is included. Only waiting period can be said all the time that has been taken in transferring of the fund. Gross basis settlement involves the one to one basis settlement without bunching with any transactions. The minimum amount of money that can be transferred using RTGS is 2 lakh rupees with no maximum limits. The transaction hour of fund by RTGS is 9a.m. to 4.40p.m. from Monday to friday and 9a.m. to 1.30 p.m. on Saturday. Like NEFT bank also charges a fee from customer for transferring the fund by RTGS.

    EFT- Electronic fund transfer

    Electronic fund transfer is also a fund transfer services offered by banks to their customer for money transfer from account to account of any bank branch to any other bank branch, in places where EFT services are enabled. The transaction made with the help of EFT can be both inter city and intra city. The service charge taken is rs 25. At present EFT centers running in India is at Ahmadabad, Bangalore,Bhuvbaneswar, Chandigarh, Chennai, Guwhati, Hyderabad, Jaipur, Kanpur, Kolkata, Mumbai, Nagpur, New Delhi, Patna and Trivanthnapuram.

    ECS- Electronic clearing service

    It is introduced by RBI which uses a series of electronic payment instruction that helps in transfer of funds instead of paper instrument. This is very effective when it comes to bulk money transaction. Under this scheme the transaction is initiated from single user source that may be bank, companies, corporate or government departments to large number of various destined account holders that may be customers or investors. At present this scheme is working at 15 centers of RBI, 21 centers of SBI and 29 other centers including PNB and other banks.

    Wrap up

    Electronic payment in India was one of the most awaited revolution in the field of money transfer. Initially the money transfer involves whole lot of tedious paper work that was lagging in time as well as tend to be super expensive. But with the coming and electronic payment thing turned out to be easy, transferring any fund is much more cost effective and time effective. While NEFT suitable for small transfer that is settled in batches, RTGS provides large transaction settled in continuous( gross settlement). Hence there is wide range of options for transferring the fund electronically and one can easily pick any one of them suited best for their requirement and need. Nowadays it is widely used by every individual and organization for quick fund transfer.


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