Advantages of using electronic transfer for making transactions

Electronic transfer is one of the most prevalent modes of making transactions; all thanks to the internet boom that we all are witnessing! This mode of payment is carried put using certain code called IFSC code that helps identify the account holder and at the same time, keeps the transactions secured too. The word IFSC stands for Indian Financial System Code and is an instrumental code in making the electronic transactions possible.

How electronic transfer of funds is useful

To understand the advantages, let’s understand the clearing process of electronic funds transfer. All electronic transactions are done through a system called National Electronic Funds Transfer that uses IFSC code. In this system, following steps are followed:

• The remitter visits his bank account and fills an electronic transfer form or NEFT form. He mentions the details of the beneficiary such as his name, account number in the destination bank, amount, and IFSC code of the destination branch. People availing internet banking visit their netbanking’s funds transfer page and fill these information fields.
• The originating branch prepares a message and sends it to NEFT pooling center.
• The pooling center passes on the message to NEFT Clearing centre operational at National Clearing Cell, RBI.
• The clearing center sorts the messages and then arranges the payments list to the payee branches destination wise. And after this, the remittance messages are sent to the respective receiving branches and relevant debit/credit entries are made.
• Then, destination banks receive the messages and ultimately pass the credits to the respective beneficiaries’ accounts.

Advantages

The process is literally as swift as it is explained in the section above, and so, the transactions are all the relatively faster. There is not float time of three working days as in case of cheque transactions; in fact, the whole process takes not more than 2 business hours. Thus, the users of NEFT enjoy the advantage of same day transactions. It is advisable to initiate the transfers between 8am and 7pm to enjoy the swiftness of this mode of making payment using IFSC code.

Another advantage is that the transactions are super safe. You are using no instruments like cheque which are likely to get lost by the payee or even at the payer’s end. The response time of NEFT transactions is quite less, thus, the user is able to find the result of the effort made in minimal time. If the payment is rejected, he gets the information same day and gets the chance to make the payment again. Thus, it helps him remain fair in the practices.