Money Transfer
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., the old-school methods of physically transferring money from one person’s bank account to the other’s through cheques, cash deposits at banks, etc. have been completely eliminated.
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.
Online Money Transfer Details
Advantages of Online Money Transfer
- 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 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
Online Money Transfer Methods
NEFT
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
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.
RTGS
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.
UPI
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.
Digital Wallet
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.