What are NEFT and IMPS transfer fees

Difference between ways to transfer money online (neft, rtgs, imps 2021

Over the past week, many of India's major banks announced a series of new fees that customers will be charged when they complete their set number of transactions (deposits and withdrawals) either through ATMs or over the counter in branches. It is clear that banks do not want you to frequent branch offices and that you choose digital banking. After demonetization, digital banking and payments will be vigorously promoted everywhere.

From large retail stores, restaurants to small footpath providers, everyone is enthusiastic about Paytm & Mobikwik. The government is also in full swing, distributing incentives like lucky raffles and cashbacks for promoting digital payments. Today in particular we are going to see what different online payment methods are available and what are the differences between them.

The many possibilities

When someone wants to transfer money today, there are numerous digital options available to them. You can use NEFT for payments up to 2 lakhs, IMPS offers a 24x7 service or the newly introduced UPI for those who can easily remember @ addresses as numbers. But what's the difference between them? The myriad of options available are confusing enough and don't make it easy with names like AEPS, BHIM & RTGS. First we get to know the different ways to get money digitally from point A to B.

There are also mVisa for VISA cards, Moneysend for Maestro / Mastercard cards and eWallet solutions such as Paytm, Freecharge and many more. But the six above are the official ones operated by the National Financial Corporation of India, a government agency dedicated to developing, maintaining and monitoring digital payments in India. Of the six companies, NEFT and RTGS are the earliest operational services from the early 2000s. IMPS was launched in 2011, AEPS in 2014 and UPI recently in 2016. So let's look at the details and differences between each one.

The differences: NEFT vs RTGS

Of all six services, NEFT & RTGS are the earliest and also the backbone for other digital transmission methods. Many other services such as IMPS and AEPS are based on RTGS, which is ultimately used for net settlement between banks. The whole way the backend works is quite complex, so I'll leave that out of the picture. If you want to know more, visit the NPCI site. The following picture shows the differences between the two.

With the asterisks, NEFT transactions may be delayed due to batch processing or if the entry is made after the specified time has elapsed. In this case, the transfer will be made the next day. On the other hand, RTGS transactions are processed individually and transferred immediately. However, both have disadvantages. First of all, you must be registered with your bank for internet banking (in case you do not want to visit the branch). Second, you need the IFSC code of the recipient's bank account. Both of these drawbacks can pose a problem for someone who is not very familiar with digital technology.

Cool tip: Still hunting for cash? These apps will help you find a charged ATM near you.

The differences: IMPS vs UPI vs AEPS vs * 99 #

IMPS: IMPS was introduced to support small payments and transfers over the phone through the bank's mobile banking app.

The main feature is that transfers can be made using mobile phone numbers and an MMID (Mobile Money Identifier) ​​code.

This code will be assigned to your account number-mobile number pair. This MMID is different for different accounts, even if the same mobile phone number is registered for both accounts. You can also send money with the old account number + IFSC code combination. In order to be able to use the service, you must register with your bank in order to activate the mobile banking function. That way you get a unique one MMID. In contrast to NEFT & RTGS, IMPS also works around the clock on public holidays.

AEPS: This facility is aimed primarily at rural people Areasin which people cannot read and write digitally as well or not at all. According to the NPCI site, one can transfer money to the Aadhar number that is linked to the bank account. AEPS does not have an app and only works via POS devices. Only a handful of banks currently support AEPS and you won't notice it as they are mostly rural areas.

* 99 #: This service, which is also aimed at the rural population, most of whom have no internet connection, works via GSM. It works with so-called USSD (Unstructured Supplementary Service Data). USSD is a system that facilitates text communication between a mobile phone and an application on the Internet.

It is the most versatile service of all.

It doesn't require an app or internet connection. You can use the service by dialing * 99 #. And I say versatile because it offers four ways to transfer money, as shown in the comparison table. You can even register without visiting the bank by creating your MPIN from the last 6 digits of your debit card + expiration date MM / YY & OTP sent to your mobile number.

UPI: This is the latest service launched in 2016 to advance digital payments and banking. If you see the other methods, an account number / cellphone number and some type of code is required to complete the transfer.

This was one of the hurdles as not everyone remembers their long bank account number.

To solve this problem, UPI uses memorable @ addresses that are not tied to a specific bank's app. You can link more than one UPI address to the same bank account.

For example, I use bags from the Empower app from ICICI & Canara Bank. They both have different UPI addresses linked to my account at the Bank of Baroda. The benefit of this is that you are not locked into your bank's app, which isn't developed and designed by the best of developers. BHIM, as you might have guessed, is a UPI app that is not tied to any specific bank.

Where do wallets fit into the picture?

Purses are a completely different entity. They are like mini accounts where you can add limited money and conduct other transactions with the same wallet. For example, anyone can register with Paytm without ID. You can add or transfer money, but you cannot physically withdraw it. Wallets don't need bank accounts either.

Banks also have their standalone wallet apps like the State Bank of India's SBI Buddy and ICICI Bank's Pocket, which are more advanced and offer features like a virtual debit card and contactless payment (NFC). You can currently top up up to Rs. 20,000 / - in a non-KYC wallet. To increase this limit (to Rs. 1, 00, 000 / -) you will need to scan and upload proof of ID and address such as a PAN card, Aaadhar card, etc. with the wallet service. Many wallets also allow you to transfer funds to a bank account by entering the account number and IFSC code.

In summary, wallets are mainly used for small payments like bills, top-ups, or to third parties like grocery sellers. In the future, there is likely to be deeper integration between your bank account and your wallet. Currently, wallets offer the option of using a different account without the need for a bank account. Plus, you can partner with various other merchants for cashback and discounts.

Final thoughts

The road to a cashless economy is still a long one. While demonization has given a boost, the effect is only felt in urban areas and towns. A large part of the rural population is still dependent on cash. Digital banking will only penetrate rural areas if adequate infrastructure is in place. Good network connectivity, cheap smartphones and apps that are easy to understand for those with limited knowledge are required. UPI & BHIM are a step in the right direction, but they still feel half-baked. Let's hope the situation improves. If you have any thoughts or views, please let us know through comments. Have fun spending it!