Cashfree Payment Gateway: Helping Micro and Small Businesses Grow - 24/7 Collections through NEFT

With a view to promote digital payment and settlement systems, the Reserve Bank of India has made the National Electronic Fund Transfer (NEFT) service available round the clock (24*7) with effect from 16 December 2019 onwards. This new feature is in line with the government's objective of building a 'cashless' society and caters to the need for fund transfers during non-banking hours.

The government is taking several measures to encourage MSMEs to use digital payment platforms and at PayU, we are constantly updating our products/features to ensure smooth online transactions for you and your customers.PayU Payment Gateway offers a wide range of payment options including NEFT (Bank Transfer), UPI, e-wallets and more.

What is NEFT?

NEFT is an electronic payment system that allows individuals to transfer funds from one bank account to another.NEFT transfers are settled in hourly batches.NEFT transfers can take anywhere from 2-24 hours.

Whilst there is no minimum limit for NEFT transfers, private banks set a maximum limit for transfers. Therefore, this payment method is great for businesses that need to make large direct transfers.

Earlier, NEFT could only be done during bank opening hours, i.e. weekdays from 8:00 a.m. to 7:45 p.m. No NEFT transactions would take place on the second and fourth Saturdays as well as during public holidays. However, from now on, NEFT services will be available on all days of the year, including holidays.

Other features of the 24*7 NEFT service

There will be 48 half-hour batches per day. Settlement of the first batch will start after 00:30 and the last batch will end at 00:00.

NEFT transactions after normal banking hours are expected to be automated through the Straight Through Processing (STP) mode.

The existing requirement that funds be credited to the beneficiary's account or returned to the bank of origin within two hours of the settlement of the corresponding instalment will continue to be enforced.

Member banks will ensure that a positive confirmation message (N10) is sent for all NEFT credits.

All provisions of the NEFT Procedural Guidelines will also apply to NEFT 24*7 transactions.

Benefits of 24*7 NEFT for your micro business

Improved Cash Flow - This new feature will allow people to make payments anytime, anywhere. Therefore, as an online retailer, you can expect to receive payments in a timely manner after December, improving the cash flow of your business. You can also improve cash flow by enabling PayU's same-day settlement feature.

Zero Transaction Charges - In June this year, RBI, in a bid to promote digital payments among micro and small businesses, cancelled the processing charges for NEFT/RTGS. Earlier, banks were charging Rs 30 to Rs 55 per RTGS transaction and up to Rs 20 for NEFT transfers.

Track Payments - No need to worry about tracking if you make any bulk transfers via NEFT. You can view your payments anytime, anywhere.PayUmoney's powerful dashboard also allows you to track, manage and reconcile payments made through NEFT or other methods. You will receive alerts for each transaction on your registered mobile number and on the PayUmoney dashboard.

Interestingly, RBI also wants to introduce a centralised fraud monitoring system to track fraudulent transactions. This will help build a stronger digital payments ecosystem and make more businesses feel secure about payments.

As per the RBI e-payments vision document, which outlines the roadmap for 2019-2021:

Electronic payment systems such as IMPS/UPI are expected to achieve an average annualised growth rate of more than 1001 TP3T with a NEFT of 401 TP3T till 2021.

The number of digital transactions is expected to more than quadruple.

Cheque payments are expected to fall below 21 TP3T for retail electronic transactions.

reach a verdict

It is encouraging to see the government taking steps to enhance the e-payment customer experience across the country. Overall, this will be a win-win situation for online MSMEs and their customers.

PayU is a full-service online payment solution for businesses. With over 450,000 merchants and growing, we offer merchants the opportunity to give their customers a seamless checkout experience, expand their reach and grow their business. For more information.