Net banking tools such as UPI and NEFT have gained popularity in recent years. Internet banking is used in even the most remote parts of the country. However, these can be very confusing at times. Continue reading to learn more about the subject.
Unified Payment Interface (UPI)
Since the demonetisation of banknotes in 2016, the Unified Payment Interface (UPI) has become popular in India. It is a simple and secure method of digital payment. Since it allows for instant fund transfers between two parties’ accounts, UPI has become a popular method of transferring money.
Benefits of UPI
Here are some of the benefits of UPI:
- UPI enables online money transfers in real time.
- Access to multiple bank accounts via mobile is available 24/7, 365 days a year.
- Provides one-click two-factor confirmation as well as one-click payment.
- UPI is a far superior alternative, as it eliminates the need for people to rush to ATMs to withdraw money. They can also avoid using the traditionally used method of paying cash on delivery.
- UPI can be used to pay utility bills and make online payments instantly.
How to Sign Up for UPI Payments
Below are the steps to follow to register for UPI:
- Step 1: The user obtains a UPI app of choice from the App Store.
- Step 2: The user creates a profile by providing personal information.
- Step 3: The user chooses “Manage Bank Account” to connect their bank and account number with their virtual ID.
NEFT (National Electronic Funds Transfer)
NEFT is a method of moving funds. It has become a popular alternative to visiting a bank for fund transfers. NEFT helps transfer funds electronically from one bank to another. This mode of fund transfer benefits business authorities and corporations where a large amount of money is exchanged daily.
Benefits of NEFT
Here is why you should use NEFT:
- NEFT is a cost-effective method of money transfer.
- The NEFT system is built on a safe platform.
- There is no need to use a check or a demand draft (DD) to transfer funds.
- A fund transfer does not require a trip to the bank. With NEFT, money can be sent electronically and can be completed quickly.
How can I make an NEFT transfer?
Below is a step-by-step guide for making an NEFT transfer:
- Step 1: Access your bank’s internet banking page.
- Step 2: From the home screen, select the “Fund Transfer” option.
- Step 3: On the “Fund Transfer” page, select “NEFT.”
- Step 4: Select a beneficiary from the list to send money to.
- Step 5: To add a new beneficiary, go to the page’s “Add Beneficiary” button. Enter details such as the account number, name, IFSC code, bank branch, and type of account.
- Step 6: Check and confirm the entered information.
- Step 7: Confirm the beneficiary addition by entering the 4-digit OTP you received on your registered mobile number.
- Step 8: The newly added beneficiary will be ready for a fund transfer after the specified time.
- Step 9: Select the beneficiary, the bank account from which funds must be transferred, and the amount to be transferred. Then click the “Confirm” button to begin the transaction.
UPI vs. NEFT
Here is the difference between UPI and NEFT:
- Money Transfer Limit: NEFT does not have a daily limit on the amount of money that can be transferred. But at the moment, the maximum value of a UPI transaction is Rs. 2 lakh.
- Devices: The only necessity for NEFT is that banks need to be NEFT-enabled. To transfer funds using NEFT, log in to your net banking portal and add your recipient as a beneficiary. Name, account number, account type, and IFSC code must be entered in the Add New Payee section. On the other hand, UPI transactions can be completed on a smartphone that is connected to the internet.
- Offline Facility: Offline transfers are possible with NEFT but not with UPI.
- Usage: When it comes to sending money to someone, the Unified Payment Interface, or UPI, is a popular option among many users because it allows you to send or receive money using a scanner, a mobile number, or a UPI ID. NEFT, or National Electronic Fund Transfer, on the other hand, is a popular online money transfer method from one bank account to another.
- Beneficiary: In contrast to NEFT, UPI does not require the addition of a beneficiary. Sending money is as simple as using a virtual payment address (VPA) or a QR code. A single bank account can also be associated with multiple virtual payment addresses. This cannot be attained using NEFT.
- Business vs. Individuals: The NEFT mode of fund transfer benefits businesses where a large amount of money is transferred daily. UPI, on the other hand, is widely used for day-to-day exchange.
In a Nutshell
The benefit of UPI is that it’s a real-time payment system that allows for the instant and quick transfer of funds between two bank accounts via a single mobile app. Providing a fast and easy alternative gives users a sense of security, which is very much needed in financial matters.
With the banking industry reaching new heights and evolving the way we make payments, people are encouraged to take the required step toward becoming cashless. People prefer to pay with a variety of non-traditional payment methods that can be done over the internet.
For more such articles, don’t forget to check out the Piramal Finance website.