Technological development in the banking sector has simplified making payments like never before. As a customer, you no longer need to visit the bank to transfer money from one account to another. You may now easily execute all your banking transactions via the internet or mobile banking right through your fingertips. This advancement has allowed in executing banking operations like never before.
The convenience and secure options offered by the banks have encouraged the usage of online payment systems. COVID-19 pandemic has been a major push on the Indian market to adapt to online transfers due to their convenience and flexibility.
Electronic Fund Transfer (EFT)- Know it Better
The transfer of money using an online network where the funds are moved between accounts via a computer network is known as Electronic Fund Transfer. Digital transfers help in eliminating paper-based transactions and reduce human efforts by a great leap. Moreover, such transactions can be made from one bank to another with absolute ease.
What are your online money transfer options?
As an individual or an organisation, there might be certain options that can be suitable to your needs. Here we list a few, for a better understanding.
National Electronic Fund Transfer (NEFT)
It is the most common method that is made in use for online money transfers. It is a deferred settlement procedure. In such a procedure, transfers are executed hourly with no particular cap on the minimum or maximum amounts. NEFT transactions can be made in batches and are efficient in handling transactions. If you choose this method, your bank branch must be NEFT-enabled.
Real-Time Gross Settlement (RTGS)
RTGS transfers help in settling real-time without any time gaps or batches. RTGS transfers are not bundled and scheduled in batches like NEFT transactions. Therefore, the funds are transferred almost immediately.
Immediate Payment Service (IMPS)
The National Payments Corporation of India (NPCI) launched IMPS in November 2010 to reduce the barriers of time imposed on bank transactions.
This is the biggest advantage that simply means that you can now transfer funds during non-banking hours and bank holidays. Currently, a structure is being worked upon to take it across other facilities like ATM, Internet Banking etc.
Here is a simple procedure that works as a guideline to transfer money from one account to another via the IMPS system.
Log in to your banking account
If the beneficiary has not been added, input their name, bank account number, and IFSC along with other important information, if needed.
Go to the ‘Fund Transfer’ tab and select the beneficiary and amount that needs to be sent.
The transaction needs to be authenticated using the OTP sent on your registered mobile number with the bank.
IMPS mobile transfers help in making any transaction without adding the beneficiary details into your account. You will need the beneficiary's bank account number and Mobile Money Identifier (MMID). MMID is a seven-digit number provided by the beneficiary's bank to garner funds via mobile banking. Thus, making transactions all the more seamless and easy to go through.
Unified Payments Interface (UPI)
This is one of the most popular and used methods for online fund transfers. It is a mobile-based payment mechanism scheme. It uses Virtual Payment Address (VPA) for fund transfers.
One of the major benefits of UPI transactions is that you do not have to share your bank account and other personal information to the other party. These steps can help with transferring funds via UPI.
Download your registered bank’s UPI-enabled mobile application.
Log in to your account with the issued user ID and password.
Create a VPA under the UPI section to send funds.
Put in the receiver's VPA details.
Choose the account to transfer the funds and enter the amount.
Recheck the details and hit the ‘Send’ button to conclude the transaction.
Digital wallets in India
Several digital wallets have been introduced in India, since the demonetization of high currency notes. Digital wallets serve as popular alternatives to make online fund transfers. You may store money in these wallets to discharge online transactions.
Based on the type of payments and use, there are varied options like open, semi-open, semi-closed, and closed wallets. Some of the popular digital wallets include Paytm, BharatPe, Amazon Pay, and PhonePe.
Cautionary pointers for online transactions
It is crucial to ensure the security of online transactions.
Here are some important pointers to consider before making any kind of online transaction.
Ensure your beneficiary details are absolutely correct. Before confirming the transfer, re-check them to avoid any lapse.
To avoid any kind of fraudulent transactions, register your email address and mobile number to receive notifications .
Avoid executing online transfers using public Wi-Fi as these networks may not be secure and protected.
Using the Electronic Clearing System (ECS), schedule regular payments like utility bills.