Payment methods in India include traditional methods and digital methods. Traditional methods are mostly associated with cash or cheque and digital transactions are mostly considered online and via credit / debit card. You can choose among host of options available.
Traditional payment methods in India
Traditional methods include cash deposit to a bank account, payment by cheque and directly paying cash.
Making payments via cash
Making payment via cash is still considered as one of the most convenient method of making payments because it allows you instantly complete transaction by making payment and taking required goods.
Other than this you can also deposit cash in payee’s bank account to confirm the transaction.
Making payments via cheque
Making payments via cheque is considered as one of the most secure payment method. In case of cheque payment both the parties have record available in their bank account books.
Digital payment methods in India
Digital payment methods in India are generally done using online banking or debit / credit card. Debit card may or may not require OTP (one time password) for enhanced security. Online include NEFT, RTGS, IMPS and ACH.
NEFT: National Electronic Fund Transfer
NEFT transactions are used when you wish to electronically transfer funds to one or more bank account. These transactions are generally come free of cost with banking services. In case of transfer within same bank transaction is done instantly and in case of other bank it may take few hours to get processed. Mostly these transactions are done online but you can also do NEFT via cheque by going to a bank. NEFT in case of other bank is limited to bank operating hours.
RTGS: Real Time Gross Settlement
RTGS is similar to NEFT and can be done online mode very easily. You can also visit bank to do this transaction via cheque. In this case transactions are done quickly and money is credited instantly to required account. In most banks these services are chargeable. RTGS is also limited to bank operating hours.
ACH: Automated Clearing House
ACH is like a standing instruction given to a financial institution to debit money when due date arrives each month or as per billing cycle. ACH is generally used for credit card and loan payments where certain amount or EMI is auto debited from the bank.
IMPS: Immediate Payment Service
IMPS, paid money transfer service provided by banks where we can transfer money irrespective of bank operating hours. It is chargeable and it is available 24 hours a day. You can transfer money using online banking and charges are dependent on bank that you are associated with. Generally it ranges between INR 5-10 per transaction.