CATEGORY - TRENDS

Online Money Transfer in India: Best Methods & Process

Trends - 24 Mar, 2024

Table of Contents

What is online money transfer?

Money transfer online involves transferring money electronically via computer-based systems without direct bank staff involvement, whether within or across financial institutions.

The Rise of Online Money Transfer in India

As India’s digital payments ecosystem has grown rapidly over the last eight years, its volume increased from just 316 crores in FY 2014-15 to 8,840 crores in FY 2021-22. Digital payment transactions totaled 7,442 crores in the fiscal year 2022, which runs from April 2021 to March 2022, according to the Ministry of Electronics and Information Technology (MEITY).

Digital payments in India are expected to triple over the four years due to the growing number of online purchases and digital adoption. One of the advantages of a cashless economy for India has been formalizing payments and reducing currency note production costs.

Demonetisation and digitalization have accelerated the use of digital methods of payment in India. While branch banking has always been preferred as a method of fund transfer, this has changed with demonetisation and digitalization.

Digital payments have been promoted by tax exemptions, price caps, and incentives for retail transactions over the years. The RBI has adapted its regulatory framework to meet the rising needs and maturity of the payments ecosystem through a prudent, evidence-based, and forward-looking approach.

With low-cost smartphones and low-cost internet access, financial institutions are testing out and improving their digital experiences with their banking customers. To meet consumer demands, financial institutions are scalably implementing online money transfer systems horizontally and vertically.

Popular Online Money Transfer Methods in India

In India, the following methods are the most common ones for instant money transfers between bank accounts.

UPI – Unified Payment Interface

The Unified Payments Interface (UPI) is a revolutionary way to transfer money instantly between bank accounts in India. Developed by the Reserve Bank of India (RBI), UPI prioritizes security, efficiency, and accessibility for everyone.

What is UPI?

UPI is a mobile application that allows you to transfer money between bank accounts anytime, anywhere. It uses a unique identifier called a UPI ID, similar to an alias for your bank account, for quick and secure transactions.

How to Transfer Money Online Using UPI

There are three main ways to transfer money with UPI:

Using Phone Contacts: Simply select a contact from your phonebook or enter the recipient’s mobile number, enter the amount, and confirm with your UPI PIN.
Scanning QR Codes: Many merchants and individuals display a QR code for easy payments. Open your UPI app, scan the QR code, enter the amount, and verify with your PIN. The transfer is complete in seconds!
Using UPI ID: Enter the recipient’s UPI ID, the amount to be transferred, and confirm with your PIN. UPI also allows traditional methods using account numbers and IFSC codes for those comfortable with that process.

Benefits of UPI

Fast and Convenient: Say goodbye to lengthy bank details! UPI transfers are instant and hassle-free.
Secure: Transactions are secured with a UPI PIN, ensuring your money stays safe.
Versatile: Use UPI to pay bills, shop online, send money to friends and family, and more.
Rewards: Many UPI platforms offer exciting rewards like cash backs and discounts for regular users.

Ready to experience the ease of UPI? Explore the options offered by Easebuzz and find the perfect solution for your online money transfers!

IMPS- Immediate Payment Service

What is IMPS?

IMPS, or Immediate Payment Service, lets you transfer funds electronically from your bank account to another, all in real-time. It’s a convenient and secure option for quick money transfers, with a daily limit of Rs 1 lakh.

How to Use IMPS for Online Money Transfer

There are three main ways to transfer money with UPI:

Log in: Access your mobile banking app or internet banking platform using your login credentials.
Add Beneficiary (if needed): If it’s your first time sending money to someone, you’ll need to add their bank details. This typically involves their bank name and account number.
Select Beneficiary & Enter Amount: Choose the beneficiary from your saved list or enter their details again. Then, enter the amount you want to transfer.
Double-Check: Before confirming, carefully review the beneficiary information and transfer amount to ensure accuracy.
Confirm Payment: Once everything looks good, proceed with the confirmation step. This might involve clicking “Send Now” or a “Confirm” or “Pay” button depending on your bank’s platform.

Advantages of Using IMPS

IMPS works on both mobile and internet banking platforms, making it an easy, safe, and reliable way to transfer money.
In order to add beneficiaries via mobile platforms, a user must provide their mobile number and MMID (Mobile Money Identifier) together. This immediate payment service can be accessed at any time, even on public and bank holidays.
Bank account numbers are not required for IMPS transactions made through mobile phones. Both the payer and payee are informed instantly following payment completion.
Aside from making payments to other merchants, receiving payments, and transferring money between bank accounts, IMPS is also used to receive payments and make payments to other merchants.

So, next time you need to send money quickly and easily, consider using IMPS!

NEFT: Transferring Large Amounts Electronically

What is NEFT:

NEFT, or National Electronic Funds Transfer, offers a convenient and secure way to transfer money electronically between bank accounts in India. Here’s a breakdown of what NEFT is and how to use it for your online transactions:

How to Use IMPS for Online Money Transfer:

Log in to your internet banking account.
Go to the “Fund Transfer” section.
Choose “NEFT” from the transfer options.
If you haven’t already, add the beneficiary by providing their name, bank account number, and IFSC code. You’ll receive a one-time password (OTP) for confirmation. The beneficiary will be added within 24 hours.
Once the beneficiary is added, select their details, enter the transfer amount, and confirm the transaction.

Advantages of Using IMPS:

Convenience: Transfer money online anytime, 24/7, eliminating the need for physical visits to banks.
Security: NEFT transactions are secure as they are regulated by the Reserve Bank of India (RBI). Both sender and receiver get instant transfer notifications.
Cost-effective: NEFT fees are typically lower compared to using checks or demand drafts.
Efficiency: Transactions are settled in batches throughout the day, typically within a few hours.
Versatility: NEFT goes beyond money transfer. You can use it for bill payments like loan EMIs, credit card dues, and more.

Important Notes:

Although NEFT transfers are convenient, they are not instant. It can take a few hours for the money to appear in the recipient's account
Only banks participating in the NEFT network can process these transactions.
NEFT transactions incur fees ranging from Rs. 2.5 to Rs. 25, depending on the transfer amount.

NEFT offers a secure and cost-effective way to manage your finances electronically. With its ease of use and growing popularity, NEFT is a valuable tool for anyone looking to transfer money conveniently within India.

RTGS: Real-Time Money Transfers

Ever need to transfer a large sum of money quickly? RTGS, or Real-Time Gross Settlement, is a secure way to electronically move funds between bank accounts in India. Here’s a breakdown of how it works and its benefits:

What is RTGS (Real time money transfers)?

RTGS as an express service for money transfers. Unlike some transfers that take a few days, RTGS completes the transaction instantly, crediting the beneficiary’s account as soon as the sender initiates it. Additionally, each transaction is settled individually, ensuring a secure and reliable process.

Why RTGS for Urgent Money Transfers?

Speed: Need funds to reach someone urgently? RTGS is your answer. The transfer happens almost instantly, perfect for time-sensitive situations.
High Value Transactions: Moving a large sum? RTGS is built for bigger transfers, providing peace of mind for important transactions.
Security: Backed by the Reserve Bank of India (RBI), RTGS offers a safe and reliable way to transfer funds electronically.

Bottom Line:

Gone are the days of waiting in line or writing checks. Online money transfers have revolutionized how we send and receive funds. With various methods like NEFT, RTGS, IMPS, and UPI, all you need is some basic beneficiary information to initiate a transfer. This makes online money transfers a quick, convenient, and secure way to manage your finances.

FAQ’s

Is online money transfer safe in India?

Yes, online money transfer can be safe in India if you use trusted channels provided by banks or RBI-authorized payment service providers (PSPs). These platforms use security measures to protect your information.

What are the charges for online money transfer?

Charges for online money transfer vary depending on the bank, transfer method (IMPS, NEFT, RTGS) and amount. Check your bank’s website or app for specific fees.

What are the transaction limits for different online money transfer methods?

Transaction limits for IMPS, NEFT, and RTGS are set by the RBI and can vary by bank account type. Refer to your bank’s website or contact them for details.