With the new innovations and modern technology, there are various online payment modes introduced which make transacting convenient and facilitating. This blog discusses four of such payment methods, explaining what is NEFT, RTGS, IMPS, and UPI and provides their detailed specifications.
With payment gateways like PayKun accepting online payments becomes easy because they provide multiple payment methods in one checkout such as Wallets, Netbanking, UPI, Card Payments, QR code, etc.
However, when a business has to choose between NEFT, RTGS, IMPS, or UPI, they need to know the difference between them to help them select the ideal ones for their business. You need to consider the needs of your business such as the payment acceptance fees, time duration, customer preferences, transaction success rate, etc.
RBI had started NEFT and RTGS and the National Payments Corporation of India (NPCI) launched IMPS and UPI.
What is NEFT (National Electronic Funds Transfer)?
Payment can be transferred to the recipient’s account on a one-on-one basis with NEFT.
- Transfer limits – Minimum is ₹ 1 and Maximum there is no limit
- Settlements – Half hourly batches 24*7*365 (the first batch starts at 00:30 hours and the last batch ends at 00:00 hours)
- Service – Available 24*7 all days of the year, including holidays.
- Requirement – the banks need to be NEFT-enabled
- Transaction Charges – Review in detail in point 12 in the RBI NEFT System
- Channels (varies from bank to bank) – Internet Banking, Mobile Banking, Branch, Internet Banking facility for corporates.
How to transfer using NEFT Net Banking?
- Log in to your Net Banking Account
- Add the beneficiary details of the recipient under ‘Add New Payee’ (Name, Account Number, Account Type, and IFSC code)
- Choose preferred mode as NEFT
- Enter the Amount and Done
What is RTGS (Real-Time Gross Settlement)?
RTGS is to be used for the transfer of large amounts in real-time.
- Transfer limits – Minimum is ₹ 2 Lakhs and Maximum there is no limit
- Settlements – in real-time
- Service (varies from bank to bank) –
- Standard Timing:
- 7:00 a.m. to 6:00 p.m. for customers
- 7:00 a.m. to 7:45 p.m. (inter-bank)
- Requirement – You need to get an RTGS-enabled account by applying with your bank. You may also check your eligibility status through your net banking. You and the beneficiary both need to be RTGS-enabled.
- Transaction Charges (varies from bank to bank)-
- a) Inward transactions – zero charges
- b) Outward transactions – ₹ 2,00,000/- to 5,00,000/- : up to ₹ 24.50/-;(exclusive of tax, if any), Above ₹ 5,00,000/- : up to ₹ 49.50/-. (exclusive of tax, if any)
- Channels (varies from bank to bank) – Internet Banking and Branch
How to transfer using RTGS Net Banking?
- Log in to your Net Banking Account
- Add the beneficiary details of the recipient (Name, Account Number, Account Type, and IFSC code)
- Choose preferred mode as RTGS
- Enter the Amount and Done
What is IMPS? (Immediate Payment Service)
IMPS is a real-time payment transfer service.
- Transfer limits – Minimum is ₹ 1 and Maximum is ₹ 2 Lakhs
- Settlements – in real-time
- Service – Available 24*7 all days of the year, including holidays
- Requirement –
For Sender – For the mobile channel the sender needs to register with mobile banking. For ATM, Internet, and Branch Banking the registration is not required
For Receiver – Need to collect MMID from the bank and share with the sender. Alternatively, can share the Account number & IFSC code or the Aadhaar number for receiving money. Also, he can register the mobile number to get SMS alerts for the transactions.
*Mobile Money Identifier (MMID) is a 7 digit number, issued by banks. MMID is one of the inputs which when clubbed with a mobile number facilitates fund transfer. Combination of Mobile no. & MMID is uniquely linked with an Account number and helps in identifying the beneficiary details. Different MMID’s can be linked to the same Mobile Number. (Please contact your bank for getting the MMID issued)
- Transaction Charges – Review In detail in point 12 in the RBI NEFT System
- Channels (varies from bank to bank) –
- 1. Mobile phones
- 2.Smartphone- Bank App/ SMS / WAP/USSD (NUUP)
- 3.Basic phone-SMS/USSD (NUUP)
- 4.Net Banking
- 5. ATM
*Various Banks and PPIs (Prepaid Payment Instrument) authorized by RBI offer IMPS such as smart cards, magnetic stripe cards, digital wallets, and vouchers. Individuals without bank accounts can transfer funds by IMPS using PPI.
How to transfer using IMPS Net Banking?
- Register for Mobile Banking Service with the Bank and Generate MMID and MPIN (The Beneficiary would also have the MMID and MPIN)
- The fund transfer is possible in 3 ways:
- Using Beneficiary Mobile Number and MMID
- Using Beneficiary Account Number and IFSC Code
- Using Beneficiary Aadhaar Number
- After registering and obtaining the required details, log in to Net Banking
- Choose preferred mode as IMPS
- Fill in the details – Beneficiary Mobile Number, MMID, the amount to be transferred, and Sender MPIN.
- A confirmation message would be received
What is UPI (Unified Payments Interface)?
This has gained a lot of popularity and is among the most used payment modes currently. As per the National Payments Corporation of India (NPCI), the UPI transaction volume crossed 2-billion at 2.07 billion as per the October 2020 statistics.
- Transfer limits – Minimum is ₹ 1 and Maximum ₹ 1 Lakh (per day)
- Settlements – in real-time
- Service – Available 24*7 all days of the year, including holidays.
- Requirement – UPI Payment Service Provider APP, Linked Bank Account, VPA (Virtual Payment Address)
- Transaction Charges – No fees currently
- Channels (varies from bank to bank) – UPI PSP APP
How to transfer or receive funds using UPI?
Step 1: Registration
Download UPI APP > Create Profile > Add Bank Account > Link with Virtual ID
*App can be downloaded from APP store or bank website
Step 2: Generate UPI PIN
Select Bank and choose Change or sets M-PIN
Step 3: Performing a UPI Transaction
a. Sending Payment using the APP
- Log In to the preferred APP
- Tap on Send Money
- Selects Receivers VPA and Enter Other Details
- Enter UPI PIN > DONE
b. Requesting Payment using the APP
- Log In to the preferred APP
- Tap on Request/Collect Money
- Selects Payers VPA and Enter Other Details like amount, etc
Payer will get the notification of requesting money
- Clicks on Notification
- Opens APP and Reviews Payment Request
- Tap Accept/Decline
- To Transfer, Sender will enter UPI PIN > DONE
Conclusion-
We hope this blog clarifies what is NEFT, IMPS, RTGS, and UPI; their differences as well as the specifications.
As one can observe, the variation in these four payment methods lies in terms of the timings, transaction limit, registrations, pricing, and channels. As per your business and transactional requirements about how soon you require the funds, the amount of the funds, etc the payment method can be used.
Sign up with PayKun to provide your customers with multiple payment options such as net banking, credit cards. Debit cards, UPI, wallets, QR code, and EMI
