Financial institutions have begun stepping into the digital world and are no more limited to direct and physical banking methods. With platforms like mobile and internet, banks and credit unions have started adapting innovative concepts like the money transfer systems. These systems offer ease and convenience to both the banks and their customers.
Money transfer platforms are a medium of transferring funds to individuals or organisations within the same bank or other banks, with the help of payment gateways that operates on devices like PCs or smartphones through internet connectivity.
Why must banks adopt money transfer systems?
The modern customers demand banking and financial services readily available at all times – the most preferred being transferring funds to family and friends – anytime, anywhere! Besides offering convenience, other benefits like security, real-time fund transfers etc. makes money transfer systems even more suitable.
The most common electronic fund transfer platforms in India
1. Unified Payments Interface (UPI)
UPI is the most recent development in the fund transfer systems post demonetisation in India. The users of UPI can transact and transfer funds to beneficiaries through their smartphones using a Virtual Payment Address or VPA. All transactions through UPI are processes in real-time i.e. are accessible 24/7. Any transfer up to Rs. 1 lakh per day can be processed using the beneficiary’s VPA at absolutely NO cost (excluding transfers to merchants wherein a fee of approx. Rs. 15 is levied.)
2. Immediate Payment Service (IMPS)
This money transfer service allows instant transferring of funds on a 24/7 basis (including weekends and holidays). This service was launched in year 2010 by the National Payments Corporation of India, however, its popularity remains low. IMPS can be accessed via mobile and internet banking. For using this facility, the beneficiary account number along with the bank’s IFS code must be available. Any amount up to Rs. 2 lakhs per day can be transferred through this mode with a basic fee of Rs. 5 + taxes (on transfers up to 1 lakh) and Rs. 15 + taxes (on transfer between 1-2 lakhs).
3. National Electronic Funds Transfer (NEFT)
NEFT is the most-adopted means of fund transfers among Indians. This facility uses a deferred settlement methodology and funds are transferred to beneficiary accounts in batches. Currently, there are 12 batches operating on weekdays from 8 am to 7 pm and 6 batches on Saturdays from 8 am to 1 pm. While there isn’t a cap on how much money can be transferred through this facility in a day, banks like SBI have set this limit to Rs. 10 lakhs per day.
4. Real-time Gross Settlement (RTGS)
RTGS facility is exclusive for higher value transactions i.e. with a minimum fund transfer value of Rs. 2 lakhs and no cap on maximum value. Any transfers made are processed in real-time but within the defined RTGS timeframes of 9 am to 4.30 pm on weekdays and 9 am to 2 pm on Saturdays. For using RTGS service, both the bank branches where a transaction occurs must be RTGS enabled. The fee levied is Rs. 30 on transactions up to Rs. 5 lakhs and Rs. 55 above the same value.
If you wish to embrace this trend for your bank or credit society and offer world-class customer service to your customers, contact Sesame. We provide A to Z banking solutions like mobile and internet banking to help your financial institution serve your customers better, increase your client base and maximise ROI. For more details, visit sesameindia.