Payment Systems
A payment system is a set of instruments, procedures, and rules that allow money to move between a sender and a receiver. In simple terms, it is the 'plumbing' of the financial world. When you buy groceries and pay using a mobile app, a payment system works behind the scenes to move money from your bank account to the shopkeeper's account. This system ensures that the transfer is safe, fast, and accurate.
Concepts (3)
NEFT is a nationwide payment system that allows one-to-one funds transfer. Unlike RTGS, NEFT works on a Deferred Net Settlement (DNS) basis. This means transactions are processed in batches every 30 minutes.
NEFT is a nationwide payment system that allows one-to-one funds transfer. Unlike RTGS, NEFT works on a Deferred Net Settlement (DNS) basis. This means transactions are processed in batches every 30 minutes. If you send money at 10:05 AM, it will be processed in the 10:30 AM batch. It is perfect for smaller amounts like rent or school fees. There is no minimum or maximum limit for most transactions, and it is available 24/7/365.
RTGS is a system for continuous and real-time settlement of fund transfers. 'Real-time' means the processing happens immediately without any waiting period. 'Gross' means the transaction is settled on a one-to-one basis, not grouped with others.
RTGS is a system for continuous and real-time settlement of fund transfers. 'Real-time' means the processing happens immediately without any waiting period. 'Gross' means the transaction is settled on a one-to-one basis, not grouped with others. It is mainly used for high-value transactions. For example, a business paying 5 lakh rupees to a supplier would use RTGS for speed and safety. The minimum amount for RTGS is 2 lakh rupees, and there is no maximum limit.
UPI is a revolutionary system that powers multiple bank accounts into a single mobile application. Developed by NPCI, it allows instant money transfer between any two bank accounts using a Virtual Payment Address (VPA) or a QR code.
UPI is a revolutionary system that powers multiple bank accounts into a single mobile application. Developed by NPCI, it allows instant money transfer between any two bank accounts using a Virtual Payment Address (VPA) or a QR code. You do not need to remember account numbers or IFSC codes. For example, scanning a BharatQR code at a petrol pump is a UPI transaction. It has made small digital payments easy for millions of Indians.
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Start Lesson: NEFT (National Electronic Funds Transfer)