What Is Online Money Transfer? Are Bank Transfers Safe & More.

Table of Contents:

1. Is It Safe To Transfer Money Online?

2. Online Money Transfer Application

3. Are Bank Transfers Safe Online?

4. How Does Online Money Transfer Work?

5. How To Do Online Money Transfer?

6. Online Fund Transfer Options

7. How To Make Online Money Transfer?

8. Increase In Online Money Transferring

9. Risks In Online Money Transfer

10. What Is IFSC?

1. Is It Safe To Transfer Money Online?

There was a time not so long ago when transferring money from one account to another involved standing in long queues in the bank or post office. But thanks to online money transfer, you can transfer the money in a jiffy and also in a secure manner. Online money transfer is the best service to transfer money between two people. Services like these took hold when customers needed a service where they could quickly and efficiently transfer money for online purchases.

Besides, online transactions help to mitigate the lengthy procedure and risks that were there earlier while sending money-orders, cash. or personal checks. This led to rising demand for digital solutions. With these digital options in place, the consumers didn’t have to set up merchant accounts or process the payments.

2. Online Money Transfer Application

The internet and technology have presented us with online money transfer apps or e-wallets. Now you can send money to anyone in India and abroad in a matter of minutes using these apps. You can do so from the comfort of your home or office so no more visits to the bank. The money transfer apps can be accessed from your mobiles as well. These mobile applications facilitate QR based money transfer as well as directly to the account with the help of the mobile number.

Making bill payments have become so very convenient through these apps. It’s like you have no reason to pay a late fine anymore. The money transfer apps have been the biggest disruption in the banking system. These easy to operate apps have people from all walks of life. It is the same for a CEO as well as a vegetable vendor. These apps have proved to be life-savers at the time of demonetisation and during the current pandemic. In the current scenario, these apps ensure contactless transactions.

3. Are Bank Transfers Safe Online?

Banks come up with an offer for instant money transfer services such as Real Time Gross Settlement (RTGS), National Electronic Fund Transfer (NEFT), and Immediate Payment Service (IMPS). Users can avail themselves of these services to transfer funds from one account to another with the help of the upgraded information technology. While making an online funds transfer, users have to fill in the beneficiary’s name. To register the payee, customers need to enter the account holder's name, the account number, and the Indian Financial System Code (IFSC).

As a transfer to the payee is primarily based on the account number and IFSC, the customer should take care while filling in the details. As per Reserve Bank of India (RBI) guidelines, banks give the sender 2 fields for entering the account number which means that the customer has to punch in the account number twice. One field is encrypted meaning the sender cannot see the account number entered in this field. In the second field, the customers can see the account number, and only when the details in both fields match, the transfers are initiated.

4. How Does Online Money Transfer Work?

It is an electronic way of transferring money from one bank account to another where financial data is exchanged in the form of bits and bytes. This is also known as Electronic Fund Transfer (or EFT). When you use a debit card at a store, money is transferred from your savings or current account into the store’s banking account. The salaries of the employees in most companies get transferred to their salary account automatically on a particular date.

All of the above transactions are all examples of EFT. Online money transfer is the contemporary option for wiring money. You can send it to somebody instantaneously simply by transferring money (or the data that represents that money). For this, both the sending and receiving parties have to provide their contact information such as the mobile number and email address to the bank.

You may also like: Money Lending in India and all about it

5. How To Do Online Money Transfer?

Various financial institutions, aided by the huge developments in banking technologies, provides a high level of service in all aspects of banking and finance. With banks constantly upgrading their performance in online platforms, customers can use either mobile banking or internet banking to transfer money.

Customers now have access to multiple fund transfer options ranging from NEFT, RTGS, IMPS, digital wallets to United Payments Interface (UPI). After demonetisation, there was a dearth of high-value currency notes. This has provided an easy option for people to send money anywhere in India.

6. Online Fund Transfer Options

NEFT is the most popular and cost-effective online money transfer option. NEFT is available on mobile and internet-based banking services offered by most banks and it follows the RBI guidelines. RTGS provides real-time settlement when the amount to be transferred is Rs 2 lakhs or above. When an individual needs to transfer and settle funds immediately to another account, IMPS is useful.

7. How To Make Online Money Transfer?

Before transferring the money, you first need to register the person’s bank account to whom you want to transfer money. He/she must be on the list of payees/beneficiaries linked to your bank account. To register the beneficiary, you have to provide certain details like name, bank account number, and IFSC code.

The transfer could be achieved by several means like Immediate Payment Service (IMPS), Real Time Gross Settlement (RTGS), or National Electronics Funds Transfer (NEFT). It is essential to add the payee’s name while making a transfer, as per Reserve Bank of India (RBI) guidelines. Banks match the beneficiary’s name to the correct account as a precautionary measure.

8. Increase In Online Money Transferring

We have discussed in detail the popular methods of online money transfer in India. The following new methods are also being used for added flexibility and convenience:

1. Digital Wallets- After the devaluation of high-value currency, towards the end of 2016, many digital wallets have been introduced in the Indian market to facilitate financial transactions.
2. UPI- The UPI from the National Payments Corporation of India is a new concept of digital transaction which is based on the mobile platform.

9. Risks In Online Money Transfer

Be careful! Make sure you enter the correct IFSC code while transferring money online. Failing this, you could run the risk of losing money. Transaction credited to a wrong account can seldom be reversed. When transferring money through your bank account you must ensure that you enter the correct account number and also the correct IFSC.

10. What Is IFSC?

The branch of every bank has a separate IFSC i.e, Indian Financial System Code. IFSC is an 11-digit alphanumeric unique code that is used to identify each branch of every bank in India. Using IFSC, RBI identifies the beneficiary’s bank to which the money has to be transferred. If you enter the wrong IFSC, the transaction will go through if the account number matches. Usually, it is not common to see two banks having the same account number, yet the possibility cannot be ruled out completely.

Let us suppose you enter the IFSC of a different bank by mistake instead of your own. If that bank has an account with the same account number as your beneficiary, then the process will be carried out easily. Online fund transfers are easy but you should be careful because once the money is credited into the wrong bank account, it is very difficult to reverse the transaction and get the money back. You have to make a trip to the bank to set it right.

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FAQs

Q. What is an Online Bank Transfer?

Ans- Online Bank transfer takes out the extra effort of visiting the bank, standing in lines, and sending money to your loved ones or business transactions. You get the liberty of sending a bunch of money sitting at the comfort of your home.

Q. What is EFT?

Ans: The full form of EFT is Electronic Funds Transfer. It's a completely electronic method that answers your question on how to transfer money to another bank account. With EFT, you have the freedom to transfer your money nationally as well as internationally.

Q. What are the different types of money transfer?

Ans: There are 3 major methods of transferring money online which are-

1. NEFT (National Electronic Fund Transfer)
2. RTGS (Real Time Gross Settlement)
3. IMPS (Immediate Payment Service)

Q. What is UPI account?

Ans- Unified Payments Interface or UPI is a real-time payment method that allows quick online money transfers. Most payments are done via smartphones with the help of VPA (Virtual Payment Address). UPI doesn't need bank account details for funds transferring.

For UPI transactions, one only needs a phone number or a UPI address. A UPI ID is generally (yourname@bankname) or (youremail@bankname) or (yournumber@bankname).

Q. Which is better NetBanking or UPI?

Ans- Net-banking is a costlier debit method than other online payment options. Merchants and consumers have to pay a certain tax in terms of every online transaction. The tax percent in NetBanking is higher than that of UPI and is also convenient for individual use. Hence, UPI is a better option for online money transfers.

Q. How do you transfer money from one bank account to another?

Ans- There are several bank apps available for online money transfers. Most of them are available in both Android and IOS software. Many of them also function on your laptop or PC. Some of the best UPI app for money transferring in India are-

• Google Pay
• Phonepe
• Paytm
• Freecharge
• Mobikwik
• BHIM UPI