Electronic payment systems in India help people transfer funds quickly from their bank account to some other account, electronically. Money transfer has become really easy with technology assisting smooth online fund transfer. These systems are preferred by individuals and businesses that do not have to go through the hassles of visiting the bank branch physically and standing in queues to enable the transfer of funds.
In India the two main electronic fund settlement systems for one-to-one transactions are:
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NEFT is a payment system that makes the transfer of funds easy and fast. With NEFT, you can now transfer funds electronically, helping transfer large amounts from one account to another, thereby reducing cash dealings and transactions. NEFT is operated and managed by national clearing cell, reserve bank of India.
This system of fund transfer was introduced in the year 2005. The system enables individuals settle one-to-one transfers and can be used by both corporates and individuals. This system can be used by firms or individuals to electronically settle payments. However, both parties must have bank accounts that are NEFT-enabled.
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Unlike other payment systems that work based on real-time settlement, NEFT transactions do not take place real-time. The transactions taking place through NEFT are cleared on a half-hourly basis. The bank executive generally collects all the transactions received within half an hour and clears the transactions through the process of netting. NEFT transactions take place on net-basis. Currently, there are 23 half-hourly settlement batches being operated from 8 A.M to 7 P.M. and the facility is available on all working days including working Saturdays.
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There is no cost for inward remittance. The Cost must be borne only for outward transactions:
RTGS is an alternative form of electronic fund transfer which enables businesses, corporates, firms and individuals settle one-to-one transactions. The funds are transferred immediately real–time without any delay, unlike NEFT. In India, RTGS is used for money transfer of higher denominations, the minimum being Rs 2 Lakh. It is a quick and secure way of transferring funds and settling payments online.
Using RTGS you can transfer funds from the bank account to the beneficiary located within India on an immediate basis. You only have to add the account details of the payee and funds are transferred instantly, without any hassles. RTGS facilitates high-value transactions with a minimum cap of Rs 2 Lakh. Almost all commercial banks offer the facility of RTGS services through net banking websites and mobile banking apps. However, the payer must be very careful while transferring funds through RTGS as the payments are final and irrevocable.
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There is no cost for inward remittances on RTGS. However, for outward transactions:
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