Online Money Transfer

Money Transfer Online

The advancement of technology has enabled various financial institutions to provide a high standard of service in all aspect of banking and financial services. While modern technology is helping banks and other businesses to streamline their services, customers are no longer required to visit banks and their branches to carry out a wide range of banking services.

With banks constantly upgrading their services on the online platforms, customers can use either internet banking or mobile banking to fulfil their banking requirements.

Money Transfer Online

Though there are many factors concerning the safety of online banking platforms, a significant rise in the usage of online transactions has proven it be useful and convenient. Customers now have access to multiple online fund transfer options ranging from National Electronic Funds Transfer (NEFT), Real-Time Gross Settlement (RTGS), Immediate Payment Service (IMPS), digital wallets, to UPI-based options, etc. After demonetization of high-value currency in India, the online money transfer options have provided flexibility and convenience across the nation.

Most banks the internet multiple options when it comes to transferring money online. Though the money transfer options have with their own advantages and disadvantages, it allows individuals to have the flexibility to choose one over the other based on their requirements.

Online Fund Transfer Options

Following are few of the popular online money transfer options in India -

National Electronic Funds Transfer (NEFT) Real-Time Gross Settlement (RTGS) Immediate Payment Service (IMPS)
NEFT is known to be the most cost-effective and convenient online money transfer option for various reasons. Regulated by the Reserve Bank of India (RBI), NEFT is available on internet banking and mobile banking services provided by most banks in India. NEFT allows individuals to transfer even the smallest amount without being worried about the fee charged by the bank. NEFT transactions are processed in batches and the funds are settled based on the cut-off time specified by RBI. When an individual needs to transfer Rs.2 lakh and above, they can consider RTGS for the real-time settlement factor. Under RTGS, the funds are settled in real-time without any delay. Unlike NEFT, RTGS doesn't follow the batch processing method, each transaction is processed on instruction by instruction basis, making it faster and efficient As the name suggests, when an individual needs to transfer and settle fund immediately to another account, IMPS can turn out to be useful since it settles fund immediately. Compare to NEFT of RTGS, IMPS is comparatively a new concept in India. Most banks allow IMPS through their internet banking and mobile banking platform.

In order to carry out any of the online money transfer methods, the bank levies a transaction charge based on various factors such as the fund value, fund transfer method, etc. Though these are the popular methods of transferring money online in India, the following new methods are also being used for added flexibility and convenience -

  • Digital Wallets – After the demonetization of high-value currency towards the end of 2016, many digital wallets have been introduced to the Indian market to facilitate digital transactions. Digital wallets are not only popular and useful for being an optional method for online transactions but also for the ease and convenience of transferring money to another user or bank account. Post demonetization, many banks have introduced their own digital wallets to cater to the increasing demand.
  • Unified Payments Interface - The Unified Payments Interface (UPI) from the National Payments Corporation of India is a new concept of digital transaction that is introduced by the Government of India. Based on the mobile platform, UPI allows users to transfer money from one bank account to the other without the need of bank details. In order to send and receive funds, UPI uses a Virtual Payment Address (VPA) which is created during the registration process with bank account details as the pre-requisites. Once the registration is completed, any UPI user can use the VPA to transfer funds.

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Factors to Consider for Money Transfer Online

  • Details of the beneficiary - In order to transfer money online, the beneficiary's details such as account number, branch, etc. play a vital role. As the individual initiative the online fund transfer, you will need to make sure that the details are accurate which will determine the effective fund settlement time. Additionally, it will be your responsibility to pay the required transaction fee for the online transfer.
  • Risk factors - Irrespective of which bank account you hold, if you are one of the internet or mobile banking users, your bank must be sending out do’s and don'ts of safe online banking practices. Though they might sound like basic guidelines, it is essential to follow them so you don’t fall prey to any of the online banking scams.

FAQ's of Online Money Transfer

  1. What are the different ways to transfer money online?

    Ans: You can opt from a number of different ways to transfer your money online. You can opt for online bank transfer methods through net banking such as NEFT, RTFS and IMPS. Apart from this, you can also make use of the bank’s telephone transfer option where you can call the customer care of the bank and make a request to transfer a certain amount of money to another bank account. If you do not have access to internet or your phone, you can visit the branch of the bank and transfer money from one account to the other.

  2. How long does an online money transfer take?

    Ans: The time taken to transfer money from one account to the other depends on the mode of transfer. If you are transferring money through IMPS, the transfer happens almost immediately. However, you cannot track your money if you sent it through IMPS. NEFT and RTGS, on the other hand, takes up to 24 hours to transfer the money from one bank account to the other. However, the advantage with NEFT and RTGS mode of online money transfer is that it is trackable.

  3. Are digital wallets safe to transfer money online?

    Ans: After demonetization, the popularity and usage of digital wallets increased and was endorsed by the government as well. With BHIM, digital wallets such as Google Pay and Paytm have become among the most used digital wallets in the country. The transfer of money happens instantaneously and is completely safe since they are regulated by the government as well.

  4. Are there risks to online money transfers?

    Ans: There can be risks to online money transfers. You must make sure that every detail is accurate while transferring money from one account to the other. The account number and IFSC code must be the right one or the money can go to another person and you might not get it back. Apart from this, the other risks involve the bank systems. However, you can still receive the money back if there is a technical glitch by the bank.

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News About Online Money Transfer

  • Number of PoS Machines likely to Increase

    The increasing focus of the government in India on digital transactions has led banks to make a decision to increase the number of Point of Sale (PoS) terminals in India more than ATMs. This move comes in as an aftereffect of demonetization and due to lesser amount of cash-based transactions in the country.

    According to Reserve Bank of India (RBI) data, the number of PoS machines have increased by 95% since the month of August this year. On the other hand, the number of ATM machines have increased only by 2.5%. The number of PoS machines have reached 29 lakh while the number of ATM machines remain at 2.2 lakh.

    The business community seems to be happy with this move because the cost of maintaining a PoS terminal is much lesser when compared to ATMs. The cost of PoS terminals currently range around Rs.1,500 to Rs.7,000. Another plus point of PoS terminals is that it is easy to use. Whereas, the price of an ATM machine ranges anywhere from Rs.1 to Rs.5 lakh.

    It has also come to light that many banks are not able to get a good rate of return on the investment made in ATMs. According to RBI data, the number people using their debit cards at ATMs to withdraw money has gone down. There has been a dip by 5.3% in August this year. At the same time, the number of debit card transactions at PoS terminals have gone up during the same time period.

    3 November 2017

  • Razorpay Launches New Payment Products

    Digital payments platform Razorpay has now launched a line of business products to enable a completely managed payment solution. Razorpay plans to improve and give a boost to merchant discount rate (MDR) transactions on debit cards.

    These new products have been introduced in the hope of increasing revenues as MDR numbers have remained low since demonetization. MDR was a major product and gave the company a majority of their profits through the travel and e-commerce sectors.

    The new line of products aim to resolve payment challenges such as invoice management, payment collection, recurring payments or payment disbursement. The company expects these products to contribute to around 30 to 40% of the revenues. The company will use the recently-launched product line to find a place in new categories such as insurance premium and mutual fund payments. The company also aims to increase its merchant payment base to 90,000 in the next fiscal year.

    28 September 2017

Display of any trademarks, tradenames, logos and other subject matters of intellectual property belong to their respective intellectual property owners. Display of such IP along with the related product information does not imply BankBazaar's partnership with the owner of the Intellectual Property or issuer/manufacturer of such products.

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