There are numerous ways of transferring money from one bank account to account. With the increasing technology, online money transfer has become the easiest way of transferring money from one bank to another without any difficulty. Money transfer basically refers to the electronic transfer of money, initiated by one person to the other. With the facilitation of services like UPI, online banking, etc. Ever since demonetization happened in India, people’s interest has diverted from cash payments to online methods of payment, whether it is online or offline. And, with the ease and comfort of the UPI service, money transfer has become easier. According to the latest data from NPCI (National Payments Corporation of India), 2.21 Billion transactions, worth Rs. 3.91 crore happened in November 2020, while 2.23 Billion transactions, valued at Rs. 4.16 crore happened in December 2020. It was also recorded that the value of UPI transactions increased by 105% in December 2020 as compared to December 2019. Here are three major means of transferring money.
Online money transfer methods
Regulated by the Reserve Bank of India, NEFT or National Electronic Funds Transfer is an electronic method of transferring money online. Most Indian banks provide the NEFT feature on internet banking and mobile banking. Money transfer made through NEFT does not require any additional transaction costs. Transactions made through NEFT are processed in separate batches. The RBI has specified a cut-off within which these transactions are settled.
IMPS, fully formed as Immediate Payment Service, is a method to transfer funds immediately from one bank account to the other. Banks allow money transfer using IMPS through internet banking and mobile banking platforms. As the name states, IMPS is useful in case of immediate money transfer which is chargeable according to the transaction amount set by the banks.
RTGS stands for Real-time Gross Settlement, meaning that through this method, the money is transferred from one bank account to the other in real-time, without any delay. RTGS works out as the best payment method if you need to transfer an amount equal to or more than Rs. 2 lakh in real time. RTGS does not follow any specific processing method unlike NEFT; hence, the funds are settled in real-time, without any delay. Through RTGS, each transaction gets processed with every instruction, which makes the money transfer process easier and faster.
Unified Payment Interface, or UPI is the most recent method of transferring money from one bank to another online. Introduced by NPCI (National Payments Corporation of India) and RBI (Reserve Bank of India), UPI money transfer eliminates the need for complex bank account details of the receiver in order to initiate money transfer. UPI ID, which acts as the virtual payment address and UPI PIN, which is the security password for confirming the transaction are the only things required to transfer money through UPI money transfer. UPI ID and UPI PIN should be created at the time of registration on the mobile payments application. After creating your UPI account, the money transfer process becomes possible with a few clicks.
To eliminate the effect of demonetisation from the country, multiple digital wallets have been introduced in order to facilitate online transactions. Digital wallets like Paytm, have become much popular owing to their multiple benefits. Money transfer made through digital wallets are free of cost, can be accessed 24*7, easy, and convenient.
Advantages of online money transfer
Online money transfer offers multiple advantages. Some of them are listed below
- One of the major advantages of online money transfer is that it makes the cash readily available unlike banks which take around 2-3 working days to transfer money from one account to another
- Banks/financial institutions that offer the facility of online money transfer allow both, international and domestic transactions. While domestic transfers are mostly free of cost, international transfers are chargeable
- Online money transfer is one of the fastest methods of transferring money. Domestic money transfer takes only a day’s time to be completed, while international money transfer takes a day or two
- In comparison to other methods, online money transfer has the simplest and easiest process to perform and complete
Points to be considered for online money transfer
- To initiate online money transfer, you must download a mobile payment application like Paytm and create your account on the same
- To begin the online transaction, you need the beneficiary’s details such as his/her bank account number, bank’s branch, IFSC, etc.
- Certain banks levy an online transaction fee, which must be borne by the sender
- It is important to keep all your online banking details private to yourself. While online banking has helped users in the long run, there is also a risk of fraud. Hence, you must be careful with your passwords and bank account details
What are the various methods of online money transfer?
The various methods of online money transfer include RTGS, IMPS, NEFT, UPI and digital wallet. Each of these methods can be performed online and allow easy and fast money transfer facility.
Is money transfer free of cost?
In most domestic transactions, money transfer is free of cost. However, some banks may charge a minimal fee on money transfer through a specific method.
How much time does it take to transfer money online?
Online money transfer takes only a day’s time to complete. Various methods of money transfer like UPI or IMPS can be completed immediately.
What are the risks involved in online money transfer?
Online money transfer is risky in situations where your bank account details are leaked or are misused by thieves/fraudsters. Additionally, there is a chance that you may enter incorrect payee details while transferring money. In such cases, your amount cannot be refunded. Hence, it is strongly recommended to be careful of all the information that you provide while transferring money from your bank account to the other’s.
What happens if I enter the wrong account details while transferring money online?
If you enter incorrect information while transferring money, then your money won’t be refunded. Hence, it is important to be extremely careful while entering the payee details at the time of money transfer.
What is UPI money transfer? Is it a method of online money transfer?
UPI stands for Unified Payment Interface. It has been recently introduced by NPCI and RBI to facilitate online money transfer, and online payments, etc. UPI money transfer allows immediate transfer of money, payment of bills, rent, etc. and is considered to be the easiest and simplest method of money transfer.
Which is the best method for online money transfer?
All the methods of money transfer are useful depending upon the sender’s needs and preferences. For instance, if you need to transfer an amount more than Rs. 2 lakh, then you should opt for RTGS. If you need to transfer money to your landlord as your monthly rent, then UPI money transfer could be your preferred method. Similarly, if you wish to transfer a lesser amount immediately, then you may go for IMPS.