What’s different is the experience. You can’t deny the fact that you have more than a dozen bank accounts, where some of them are used for investments and other financial products; but only one of them is used for day-to-day expenses.
Well, one reason could be due to convenience. You may want to use an e-wallet as it’s convenient and easy to use. But what about when you need to make a payment to another bank or an online retailer? Does your e-wallet support all these?
Another reason could be security. If you’re using UPI, chances are that the money will be safe in your account unless you lose your phone. If you use cards, then the chance of getting hacked is much higher as compared to UPI transactions because there is always involvement of third party service providers in card transactions which makes it easier for hackers to steal information from them.
What is a Recurring Payment Mandate?
The e mandate process is similar to the payment process. The main difference between the two is that while payments are made from one account to another, mandates are used when someone wants to authorize someone else (and/or their nominated third party) to make regular withdrawals from their own account without having access to it themselves.
A mandate is a consent by an individual or business to consent to debits at a predefined frequency to a specific business entity, like a Lender or an Insurer, for example.
A mandate can be taken in various fashions electronically using ENACH or physically using a physical NACH to a specific corporate, backed by a relevant authorization mechanism to be audited or approved by the customer’s sponsor bank (the account where the payer holds the bank account).
What is the Objective of Recurring Payments?
It’s pretty simple. To ensure payments, primarily to merchants or business entities, happen promptly without minimal hassles to the payer, but with a level of authentication. Let’s deep dive into the basics.
What are the Types of Recurring Payments?
ECS Mandates are primarily payer-initiated, where a biller is added to the payer’s bank account by the payer.
NACH Mandates are primarily payee initiated where the payee creates a directive authorized by the payer through specific modes.
These are primarily payee-initiated mandates where the payee creates a directive authorized by the payee through UPI.
The mandates are primarily payee initiated, where the payer creates a declaration authorized by the payee through a debit or credit card.
What are NACH Mandates?
The National Payments Corporation of India (NPCI) has said that it has processed 2.46 billion transactions through its National Automated Clearing House (NACH) infrastructure in the current financial year.
NACH mandates, as mentioned above, are a recurring payment gateway method where the mandate is linked to an underlying bank account of the payer, which in most cases is a savings or a current account.