Digital Payment Transfer Modes

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Transfer mode of payment, well, we learn about Digital transfer mode of payment. In my earlier posts, we learned the process and working of the payment card industry along with compliance and security-related features. We will move forward and understand some basic terms and transfer modes used in the payment industry and how they are used in Digitalised payment network which is slowly binding the economy and leading to strategic transformation. A simple process of payment is what we all aim for!

Lets understand some basic terms for payment modes.

1. Different Payment Modes

There are different payment used for successful transactions. For example, NEFT/RTGS/IMPS/ACH/SEPA/BHIM/NPCI/TEZ/UPI. We will be understanding in depth each of the terms.

2. NEFT: National Electronic Funds Transfer

NEFT stands for  National Electronic Funds Transfer (NEFT) is an electronic fund transfer system which settles transactions in batches. This feature is available both online and offline (branch)

Once you opt for this transfer, the amount is not immediately transferred but is done in the next settlement cycle. NEFT has settlement cycles running through the day.

  • Transaction Limits 
    Minimum Amount: Rs.1
    Maximum Amount: No limit
  • Settlement Mechanism:Batches
  • Transfer Speed:2 hours (subject to cut-off timings and batches)
  • Service Availability:
    Weekdays: 12 batches (8:00 a.m. – 6:30 p.m.)
    Saturday: 6 batches (8:00 a.m. – 1:00 p.m.)
    Sunday, bank holidays: Unavailable
  • Payment Options: Offline (Bank Branch) and Online


3. RTGS: Funds Transfer

RTGS : It stands for Real Time Gross Settlement. They are done where the payment amount is more than 2 lakh.

In RTGS, the transactions are settled individually. RTGS transactions are processed continuously throughout the RTGS business hours. The person to whom the funds are transferred gets it credited into his or her bank account in 30 minutes.

  • Transaction Limits 
    Minimum Amount: Rs 2 lakh
    Maximum Amount: Rs 10 lakh
  • Settlement Mechanism:One-on-one
  • Transfer Speed:Instantly
  • Service Availability:
    Weekdays: 8:00 a.m. – 4 p.m.
    Saturday: 9:00 a.m. – 4:30 p.m
    Sunday, bank holidays: Unavailable
  • Transfer Charges:
    From Rs.2 lakh to Rs.5 lakh – Rs.25
    From Rs.5 lakh to Rs.10 lakh – Rs.50
  • Payment Options: Offline (Bank Branch) and Online

4. IMPS Funds Transfer

IMPS :  Immediate Payment Service

Unlike the other two methods of fund transfer that become unavailable on bank holidays and during off working hours, IMPS functions 24 X 7 allowing a fund transfer at any time of the day.

IMPS facility is provided only on the internet and online banking services. Few banks may offer SMS-based IMPS service to mobile banking users.

  • Transaction Limits 
    Minimum Amount: Rs.1
    Maximum Amount: Rs 2 lakh
  • Settlement Mechanism:One-on-one
  • Transfer Speed:Instant
  • Service Availability: 24 X7
  • Payment Options:Online

5. ACH: Automated Clearing House

ACH is not used in India but is a popular method used in USA . It processes large volume of credit and debit card transactions in batches. Each ACH credit transaction settles in one to two business days, and each debit transaction settles in just one business day, as per the Rules.

NPCI: National Payment Corporation of India

NPCI is an umbrella Organization for all retail payments in India. NPCI provides solutions which are simple, easy to use, safe, and secure, fast and also cost-effective. NPCI aims to operate for the benefit of all the member banks and the common man at large.Rupay,BHIM,UPI,IMPS,NACH,Bharat QR are some of its offerings.

National Payments Corporation of India (NPCI) has implemented “National Automated Clearing House (NACH) which provides a web-based solution to facilitate interbank, high volume transactions that are repetitive in nature.


Recently, Google launched its payment app called Tez in India. Google Tez is a UPI app that provides easy bank-to-bank money transfer and payment facility. BHIM app is another UPI app that is, in fact, currently the most popular UPI app. Both these apps have almost similar functionality.  Google Tez has a cash mode feature which utilizes audio QR technology that allows users to transfer money after pairing the devices where one is payee and other is payer.No account details are required here.

Both these apps have clean and easy to use interface. BHIM supports transactions of payments using Aadhar number which is linked to bank account.

More apps like Phone Pe are entering into the market with a vision of making payments simpler without compromising security.
Transfer mode of payment

Happy Learning for Digital Transfer mode of payment.

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