What is mean by online money transfer –
Money transfer online involves transferring money electronically via computer-based systems without direct bank staff involvement, whether within or across financial institutions.
Growth of Online Money Transfer in India
As India’s digital payments ecosystem has grown rapidly over the last eight years, its volume increased from just 316 crores in FY2014-15 to 8,840 crores in FY2021-22. Digital payment transactions totaled 7,442 crores in the fiscal year 2022, which runs from April 2021 to March 2022, according to the Ministry of Electronics and Information Technology (MEITY).
Digital payments in India are expected to triple over the four years due to the growing number of online purchases and digital adoption. One of the advantages of a cashless economy for India has been formalizing payments and reducing currency note production costs.
Demonetisation and digitalization have accelerated the use of digital methods of payment in India. While branch banking has always been preferred as a method of fund transfer, this has changed with demonetisation and digitalization.
Digital payments have been promoted by tax exemptions, price caps, and incentives for retail transactions over the years. The RBI has adapted its regulatory framework to meet the rising needs and maturity of the payments ecosystem through a prudent, evidence-based, and forward-looking approach.
With low-cost smartphones and low-cost internet access, financial institutions are testing out and improving their digital experiences with their banking customers. To meet consumer demands, financial institutions are scalably implementing online money transfer systems horizontally and vertically.
Online Money Transfer Options
In India, the following methods are the most common ones for instant money transfers between bank accounts.
1. UPI – Unified Payment Interface
The Reserve Bank of India (RBI) expressed its commitment to developing a national payment and settlement system that is interoperable, safe, efficient, accessible, inclusive, and authorized. The UPI system was officially launched for public use in 2016 as part of the Green Initiative to reduce paper consumption in domestic payments.
The Unified Payment Interfaces (UPI) is an application that allows the transfer of money between bank accounts for free and instantly. Users must have a UPI ID to transfer funds through UPI. To transfer money through UPI, a user needs a unique 8-digit number (UPI ID) and a 4-digit (UPI-PIN) that identifies his/her bank account.
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The UPI method of transferring money online –
- You can send money by selecting a contact in your phonebook or entering a mobile number, highlighting the amount to be transferred, and adding your PIN.
- The process of sending money through UPI involves scanning the recipient’s QR code. You need to open the preferred application on your phone, click on ‘Pay’ and then select ‘QR code’. Scan the QR code of the receiver, enter the amount, and then enter your PIN. Afterwards, your payment will be complete within a few seconds.
- The process of transferring money through UPI ID is as simple as opening the mobile payment app, entering the amount that needs to be transferred, and verifying the transaction with your MPIN.
- UPI also supports the traditional method of paying by entering the account number and IFSC of the recipient, stating the amount, and entering your personnel identification number. Your payment will be processed immediately.
Advantages of UPI (unified Payment Interface)
- Payments made online quickly and easily.
- Transferring money safely and securely.
- Provides you with the ability to pay your bills, shop online, etc.
- As a regular UPI user, you can earn discounts, cash back, and other rewards.
2. IMPS- Immediate Payment Service
IMPS stands for Immediate Payment Service, meaning you can transfer funds immediately using this method. Transactions made through IMPS have a maximum daily limit of Rs 1 lakh and are subject to an additional service tax. The instant payment service offers a secure, real-time interbank fund transfer option at your fingertips that is economical for users and safe for the banks.
The IMPS method of transferring money online –
- Using your USER ID and password, log into Internet on mobile banking service.
- Add your beneficiary’s bank details if you do not have one yet and it will appear the next time you do IMPS.
- Select the beneficiary and then enter the amount to transfer.
- Check the information is accurate before selecting ‘Send Now’.
- Click the Confirm or Pay button to confirm the payment.
Advantages of IMPS (Immediate Payment Service)
- IMPS works on both mobile and internet banking platforms, making it an easy, safe, and reliable way to transfer money.
- In order to add beneficiaries via mobile platforms, a user must provide their mobile number and MMID (Mobile Money Identifier) together. This immediate payment service can be accessed at any time, even on public and bank holidays.
- Bank account numbers are not required for IMPS transactions made through mobile phones. Both the payer and payee are informed instantly following payment completion.
- Aside from making payments to other merchants, receiving payments, and transferring money between bank accounts, IMPS is also used to receive payments and make payments to other merchants.
3. NEFT- National Electronics Fund Transfer
Transactions are not made through NEFT in real-time, which implies that they take a few days to complete. NEFT is a one-to-one payment system, so only banks that offer the NEFT services can process transactions. The transactions you can make through NEFT are Unlimited. You will have to add beneficiaries on the internet banking portal of your required bank in order to access the NEFT services.
According to RBI guidelines, payments processed via NEFT are settled in batches of 30 minutes. A fee is charged on all NEFT transactions, ranging from Rs 2.5 to Rs 25.
The NEFT method of transferring money online –
- Your internet banking account must be logged in.
- Choose ‘Fund Transfer” on the main page.
- The “NEFT” option will appear in the dropdown menu.
- NEFT payments require you to add a beneficiary to your account list if you haven`t already done so.
- Adding a new beneficiary requires clicking the ‘Add beneficiary’s name, bank account number, IFSC, etc. Click ‘Confirm’ or ‘Add’ when done.
- The bank will confirm and add a beneficiary to your account within 24 hours, but before that you must enter the OTP sent to your registered mobile phone.
- To make the money transfer, you must select the beneficiary details (to whom the money needs to be sent), enter the amount, and confirm the transfer.
Advantages of NEFT (National Electronics Fund Transfer)
- Through NEFT, you can transfer money easily, conveniently, and efficiently since all transactions are completed online; third parties are not involved.
- NEFT transactions are fully secure because RBI is involved. Upon completion of the transaction, both parties get an instant notification from the other.
- Money transfer through NEFT is cost-effective since you do not have to use checks or demand drafts.
- NEFT can be used for more than just money transfers; it can also be used to pay for loan payments, credit card balances, EMIs, and other debts that need to be paid.
4. RTGS – Real Time Gross Settlement
RTGS (Real Time Gross Settlement) is a way to transfer money in real time and on a gross settlement basis form one bank account to another. A ‘real-time’ transaction occurs as soon as the sender initiates it, and a “gross settlement” means the instructions regarding the transfer are executed one by one.
RTGS is used for high value transactions. Online and offline transaction processing is both possible with RTGS. RTGS transactions are processed on a one-to-one basis whenever the user needs them.
The RTGS method of transferring money online–
- Select RTGS from drop down menu on the main page of your internet banking account.
- Click on ‘Add beneficiary’ on the page to add a new beneficiary to the list of beneficiaries in your account.
- Select ‘Confirm’ or ‘Add’ and enter the beneficiary’s name, account number. IFSC, etc.
- The process will take around 24 hours to complete once you enter the OTP sent to your registered mobile number.
- In the beneficiary details, select the beneficiary (to whom money needs to be transferred). Enter the amount and click “Transfer” to confirm the transfer.
- Your bank account will be credited with the amount after you click ‘Confirm’.
Advantages of RTGS (Real Time Gross Settlement)
- RTGS is a safe and secure method of transferring money because it is managed by the Reserve Bank of India (RBI).
- In real-time, RTGS facilitates fund transfers.
- Transacting with RTGS does not incur any additional charges. The RTGS services can be accessed 24/7.
- Online internet banking is used to initiate RTGS transactions. ALL RTGS transactions are legal, so fraud risk is minimal.
A quick and convenient way to transfer money is to sent it online. The online platforms have allowed users to conduct transactions or transfer money between bank accounts more easily and conveniently. It is possible to transfer money online via various methods, including NEFT, RTGS, IMPS and UPI. You only need to know a little about your beneficiary’s account to transfer funds. India’s leading payment solution, Easebuzz, is designed with the utmost ease and security.