Demonetisation has brought in a revolutionary change in the ecosystem with increasing use of digital transactions. A plethora of digital payment gateways such as NEFT, RTGS, e-wallets, UPI emerged to cater to customers facing cash crunch. However, the flip side to the sudden prominence of digital transactions is that the sheer number of options available make it difficult for customers to decide which one to go for. Let us do a comparative analysis of some popular modes of payment such as NEFT, RTGS and UPI.
The National Electronic Fund Transfer (NEFT) is the most commonly used method to transfer funds from one bank account to another. There is no cap on the amount of money that can be transferred. The fund transfer process is fairly simple and it goes as follows:
You need a net banking facility to log into your bank account using your user ID and password
The account details of the beneficiary to whom you need to send money should be added to your account
Enter the account holder’s name, account number and IFSC code of the bank branch of the transferee
Once the beneficiary is added, wait for the bank’s approval
Once approved, the money can be transferred to the beneficiary’s account
NEFT transfers are chargeable and the cost ranges from Rs.2.50 to Rs.25 along with applicable taxes
Funds are usually transferred in batches and on the same day
A maximum of Rs.10 lakh can be transferred at once through NEFT
The Real Time Gross Settlement (RTGS) is used to transfer large amounts of money. While the minimum amount that can be transferred is Rs.2 Lakh, there is no cap. An RTGS transfer is done on a real-time basis and the charges levied are higher. You would have to add beneficiaries using similar steps as that of NEFT. Once added, the fund transfer process is similar to that of NEFT.
A relatively newer concept, UPI stands for Unified Payments Interface. UPI enables fund transfers through smartphones using lesser number of steps, free of cost. There is no need to share personal details such as bank account number or credit/ debit card details. Transfer can be done any time of the day. However, the maximum amount that can be transferred at once is Rs.1 lakh. Following are the steps you need to follow to be using UPI:
- Download your bank’s app and login to your netbanking facility through it
- Create a Virtual Payment Address (VPA) for yourself, which is like an email address, for receiving money
- Money is transferred using VPAs of the transferor and the transferee.
- If you are still hesitant about your preferred mode of payment, let’s look at the differences between these at one glance:
- Once you key in the VPA and the amount, the money would be transferred immediately.
Source: Times Of India