Differences between UPI, NEFT, IMPS and RTGS

By on September 20, 2022 0

The advancement of digitization has emphasized online transactions during the period. Online transactions basically occur during the process of buying and selling through the Internet. The most popular online transaction modes are UPI, NEFT, IMPS and RTGS.

Perhaps the majority must have used these modes of transactions once or consecutively. But do you know the differences between UPI, NEFT, IMPS and RTGS? No then, browse the article to learn all about these four modes of online transactions:

IPU

UPI is the most popular online transaction mode, which stands for Unified Payment Interface. Nearly 10 lakhs of transitions are initiated via UPI in a month. The immediate payment method is a concept that allows users to hold multiple bank accounts in a single mobile application.

The idea of ​​UPI was developed by the National Payments Corporation of India and is controlled by the RBI and the Indian Bank Association. Discover the main advantages of UPI from the pointers below:

  • Based on 2-factor authentication, UPI provides absolutely secure transactions with just one click.
  • UPI operates as an immediate payment service.
  • With UPI, users cannot simply make payments, but can also make collection.
  • UPI allows users to initiate transactions from any bank’s UPI application.
  • The daily transaction limit for a single UPI user is 1 Lakh.
  • All transactions can be easily done with UPI ID.

NEFT

Introduced in 2005 by the Reserve Bank of India, an electronic funds transfer system. The full form of NEFT is National Electronic Funds Transfer. It allows all users to transfer capital online from one NEFT-enabled bank account to another.

NEFT is one of the most secure, economical, reliable and efficient means of transferring funds between banks. To initiate a transaction, a customer is asked to complete an application form providing beneficiary details and the desired amount.

The main advantages of NEFT are:

  • NEFT is considered a one-to-one payment facility.
  • No third parties are involved in the transaction process, which makes it completely safe and secure.
  • No minimum fees are levied by RBI on banks.
  • It is the fastest and most efficient way to transact online, as payments made through NEFT are processed and settled within half an hour.
  • The recipient and sender of the funds are notified instantly at the end of the transaction.
  • With no requirement for checks or demand drafts, NEFT becomes economical.
  • NEFT can also be used to pay loans, installments, credit card dues, EMIs, and more.

IMP

IMPS Electronic Funds Transfer Service stands for Immediate Payment Service. IMPS helps customers transfer money instantly from one account to another, which includes inter and intra-bank transfers.

Transactions initiated via IMPS are performed in real time, which means that the credited amount will be reflected in the beneficiary’s account within seconds. Enabled through multiple channels, IMPS has not charged any fees on minimum or maximum amount transfers. The reasons to choose IMPS for money transfers are:

  • IMPS fund transfer can be done via MMID, Aadhaar number or mobile number.
  • It’s fast, safe, secure and cost effective.
  • IMPS has no minimum amount limit for fund transactions.
  • Users can enjoy the benefits of IMPS around the clock, even on holidays.
  • Transactions on IMPS can be done through mobile phones, internet banking and even ATMs.
  • The transaction does not require the beneficiary’s account number, IFSC code or other bank details.

RTGS

This fund transfer system stands for Real Time Gross Settlement. It allows the instantaneous transfer of high-value interbank funds transfers. However, transactions once made through RTGS are final and irrevocable.

RTGS was introduced in 1985 and has only been activated in 3 central banks. RBI adopted RTGS in 2004 and currently over 72 banks are part of the RTGS system. This system has no maximum transaction limit, although the minimum transaction value must be equal to or greater than INR 2 Lakh. The advantages of the RTGS system are:

  • RTGS transactions can be made online and offline.
  • It carries out both intra-bank transfers and customer transactions.
  • RTGS also facilitates users with an option to schedule trades.
  • The 24X7 transactions option saves time and performs immediate clearing of funds.
  • The individual credit system is exceptionally reliable.

With the expansion of the government’s flagship initiative “Digital India”, India’s bid for cashless translation has surged. Supported by endless modes, online transactions have become the most secure, flexible and affordable online transactions.