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Modes of Payment

The Indian banking sector provides various payment methods including cash, cheques, demand drafts, debit and credit cards, UPI, IMPS, NEFT, RTGS, mobile wallets, and the BHIM app, catering to both individuals and businesses. Visa and Mastercard facilitate electronic funds transfers through their networks, allowing banks to issue cards for transactions. These payment methods enhance convenience, speed, and security for users in India.

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8 views2 pages

Modes of Payment

The Indian banking sector provides various payment methods including cash, cheques, demand drafts, debit and credit cards, UPI, IMPS, NEFT, RTGS, mobile wallets, and the BHIM app, catering to both individuals and businesses. Visa and Mastercard facilitate electronic funds transfers through their networks, allowing banks to issue cards for transactions. These payment methods enhance convenience, speed, and security for users in India.

Uploaded by

apihalaskar
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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The Indian banking sector offers various modes of payment to facilitate

transactions for individuals and businesses. Here are some commonly used
payment methods in India:
1. Cash: Physical currency notes and coins are widely used for small
transactions and day-to-day expenses.
2. Cheques: A written order directing a bank to pay a specific amount of
money from a person's account to the person in whose name the cheque
has been issued. Example: HDFC Bank cheque, SBI cheque, etc.
3. Demand Drafts (DD): A pre-paid negotiable instrument, similar to a
cheque, where the payer bank guarantees the payment. Example: ICICI
Bank Demand Draft, Axis Bank Demand Draft, etc.
4. Debit Cards: Linked to a bank account, debit cards allow users to make
payments directly from their account electronically. Examples include
Visa Debit, Mastercard Debit, Rupay Debit, issued by various banks like
State Bank of India, ICICI Bank, HDFC Bank, etc.
5. Credit Cards: Cards that allow users to borrow money from the card
issuer up to a certain limit to make purchases or withdraw cash. Popular
credit cards in India are issued by banks like HDFC, SBI, ICICI, and Axis
Bank.
6. UPI (Unified Payments Interface): A real-time payment system that
enables instant money transfer between bank accounts through mobile
phones. UPI apps include Google Pay, PhonePe, Paytm, and others
provided by different banks.
7. IMPS (Immediate Payment Service): Allows instant inter-bank
electronic fund transfer 24/7 through mobile phones, internet banking, or
ATMs. It operates on a real-time basis.
8. NEFT (National Electronic Funds Transfer): A nationwide funds
transfer system facilitating one-to-one funds transfer between banks.
Transactions are settled in batches.
9. RTGS (Real-Time Gross Settlement): A system for large-value
instantaneous fund transfers, settled individually in real time. It is
typically used for high-value transactions with immediate clearing.
10.Mobile Wallets: Prepaid instruments that store money digitally, allowing
users to make payments and transfer funds. Examples include Paytm,
Mobikwik, and PhonePe.
11.BHIM (Bharat Interface for Money): A UPI-based mobile app
developed by the National Payments Corporation of India (NPCI) for
quick and secure money transactions.
These payment methods have evolved over time and offer various advantages in
terms of convenience, speed, and security, catering to the diverse needs of
consumers and businesses in India.
Visa and Mastercard are global payment technology companies that facilitate
electronic funds transfers and enable transactions between financial institutions,
merchants, and consumers.
 Visa: Visa operates a network that connects financial institutions (like
banks), merchants, and consumers. They offer debit, credit, and prepaid
cards under the Visa brand. These cards can be used for purchases at
millions of locations worldwide and for online transactions.
 Mastercard: Similarly, Mastercard provides a network that enables
payment transactions between banks, merchants, and cardholders. They
offer credit, debit, and prepaid cards bearing the Mastercard logo,
accepted at numerous merchants globally for purchases and online
transactions.
Both Visa and Mastercard don't issue cards themselves; rather, they provide the
infrastructure and technology for banks to issue cards carrying their logos.
Banks or financial institutions issue Visa or Mastercard-branded cards to their
customers, allowing them to make purchases or access funds based on the
available credit or balance in their accounts.
These companies ensure the secure and efficient transfer of funds between
parties involved in a transaction, offering convenience and security to
consumers and merchants worldwide.
12. Third- Party Apps- https://www.npci.org.in/what-we-do/upi/3rd-party-apps
13. Payment Gateways- https://razorpay.com/blog/payment-gateway-101/

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