7 Easy ways for e-payment in India

Hello Readers,
From a couple of months, you might only be hearing words like cashless, liquid money, plastic money etc. And maybe trying your hands with various options for online payment.

There is no single best payment option for everyone and all transactions. Here is an overview of how the various digital payment methods compare.

1. Debit & Credit cards

Best suited for/USP: Online & point of sale

Maximum limit for a transaction: Set by card/bank

Time of operation: 24×7

Time for a transaction to complete: Instant

Financial data needed to make a transaction: Pin/Card number, CVV, expiry date. At a point of sale, the card is also required.

The cost of transaction: Debit Cards charge for online payments of up to Rs 2,000 at 0.75%. Over Rs 2,000 payments, charges capped at 1%. Credit cards charge an average 2.5%

2. Real Time Gross Settlement Systems (RTGS)

Using RTGS, the beneficiary bank receives fund transfer immediately. It’s not bunched together with any other transaction

Best suited for/USP: High-value transaction

Maximum limit for a transaction: Minimum Rs 2 lakh

Time of operation: 8 AM to 4.30 PM on working days

Time for a transaction to complete: Real-time

Financial data needed to make a transaction: Account number, password, beneficiary registration, IFSC code

The cost of transaction: Between Rs 2-5 lakh, charges up to Rs 30 per transaction. Above Rs 5 lakh, charges can’t exceed Rs 55 per transaction

3. National Electronic Fund Transfer (NEFT)

Transfers funds from one bank to another. Settlements in batches settled in hourly time slots.

Best suited for/USP: Cheaper option to RTGS

Maximum limit for a transaction: Rs 10 lakh

Time of operation: 8 AM to 4.30 PM on working days

Time for a transaction to complete: Same day

Financial data needed to make a transaction: Account number, password, beneficiary registration, IFSC code

Cost of transaction: Above 5 lakh, NEFT works out cheaper, but there is a trade-off with the time taken to complete payment

4. Immediate Payment Service (IMPS)

Account holder transfers funds instantly.

Best suited for/USP: Commonly-used mode

Maximum limit for a transaction: Rs 2 lakh per day

Time of operation: 24×7

Time for a transaction to complete: Instant

Financial data needed to make a transaction: Account number, password, beneficiary registration, IFSC code

Cost of transaction: Charges left to discretion of the bank

5. Unified Payment Interface (UPI)

This is a phone app that allows transfers between any two bank accounts via a smartphone without account details. The customer pays merchant online & offline, without card details, IFSC code, or net banking/wallet passwords. UPI links account identifiers – name, account number, IFSC code — to a ‘virtual payment address’(VPA), a virtual ID

Best suited for/USP: Phone app. No intermediary. Money goes to & from your account

Maximum limit for a transaction: Rs 1 lakh

Time of operation: 24×7

Time for a transaction to complete: Instant

Financial data needed to make a transaction: VPA (virtual payment ID) of recipient & m-Pin (Pin number the security feature). Two people with VPAs can send money to each other instantly having only each other’s VPA. Those with phone numbers registered with banks can go live with UPI once they download a UPI enabled app from any bank.

The cost of transaction: Money stays in your account until a transaction is complete, you earn interest on it.

6. Unstructured Supplementary Service Data (USSD)

The USSD protocol is possible on all phones that can send text messages.

Best suited for/USP: Accessible without the internet

Maximum limit for a transaction: Rs 5,000

Time of operation: 24×7

Time for a transaction to complete: Instant

Financial data needed to make a transaction: Only Aadhaar number, IFSC or code allotted by banks on registration

The cost of transaction: USSD is turning out to be expensive as even if a person checks only his balance, he is charged Rs 1.50 by the telco.

7. E-wallets

Best suited for/USP: Small value transactions

Maximum limit for a transaction: Rs 20,000 per month

Time of operation: 24×7

Time for a transaction to complete: Instant

Financial data needed to make a transaction: Login

The cost of transaction: No transaction charges. Fees could be charged if you transfer money back from your wallet to your bank account.

Know more about E-Wallets in India

List of popular E-Wallets in India 2016

What do you think?

Dear Reader,
If you know any other e-payment method, feel free to list it out in the comments section with a little description. I will make sure to add it to the list.

Do not hesitate to share this post with your friends.

Happy Reading!