Put your transactions on autopilot

Put your transactions on autopilot

Between a human resources job and a variety of hobbies, Mumbai-based Nibedita Ghosh, 26, has little spare time. So for all things time-consuming and mundane, such as paying utility bills, she makes use of technology. So her recurring mobile phone bill is now taken care of through two SMSes. “I have given standing instructions to my bank. This way I don’t have to bother about missing the last date," she says. One SMS alert comes from her mobile service provider whenever her bill is generated and the other from her bank confirming the transaction. Here are three important technological wonders that will help you manage most of your transactions with greater ease and give you freedom from money chores.

Electronic clearing service (ECS)

ECS works well for paying recurring bills such as cellphone bills or insurance premiums. Says Puneet Nanda, executive director, ICICI Prudential Life Insurance Co. Ltd: “So not only have the insurers given customers freedom to buy a policy online, but have also offered additional payment options such as the ability to pay premiums through electronic channels like direct debit, Internet banking or ECS."

But you need to be careful with ECS transactions. Ensure that you cap the debit amount, especially on utility bills so that you get alerted whenever the bill is larger than your expectation. It will put you on your guard and help you catch billing errors, if any, or alert you to control your usage of the service in future.

Easy life: Nibedita Ghosh has instructed her bank to automatically make utility bill payments.

ECS can be used even for receiving money. Income-tax refund through ECS, for instance, is a big relief. “The government through its refund bank, State Bank of India (SBI), will directly transfer the fund in your account. There are two huge benefits of ECS. One, timely payment; it takes about 60 days. Two, even if you change your address, you can be sure to get your refund," Says Saakar Yadav, managing director, Myitreturn.com, an e-filing portal.

Mobile payment

You can access your bank account using your mobile phone. You can download mobile applications made by banks for various types of phones and make payments using Internet banking. Alternatively, you can access the website on your phone; the service provider throws up a mobile-friendly version.

Another way, which is still very nascent, is to load cash on your phone and make payments. Currently, Airtel Money and other wireless transaction platforms such as PayMate offer this facility.

You can even use your mobile to trade in stocks. While some brokerages allow consumers to track live market levels and intra-day charts, others enable buying and selling stocks. The way it works is that you download an application on your mobile phone and then either register or use your existing online trading account to access a mobile trading platform. The buying instruction goes via the broker to the registered bank account. If there is balance in your broking account, then that gets used up. This works on most types of phones, including Android, iPhone and Windows operating systems.

You can also invest in mutual funds through your mobile phone. Seven out of 44 asset management companies currently offer the facility. Some let you view your portfolio by sending an SMS, while others let you transact through your mobile by downloading an application on your phone and using the Internet to carry out a transaction. In case of the latter, you typically get a wider choice of transactions.

In both the cases, you have to start by filling up a physical form and registering with the fund house; in most cases you can use the facility only if you are an existing folio holder. This is akin to a standing instruction for an asset management company to debit (or credit) the specified bank account when you send a purchase (or sell) instruction through your mobile.

To use the SMS facility, you can use any mobile handset that allows you to send an SMS. If you want to invest in a scheme where you have to download an application, a basic Java-enabled phone with an Internet connection will suffice.

National Electronic Funds Transfer (NEFT)

Most of you would be familiar with Internet banking and would have transferred funds across multiple banks. That’s thanks to NEFT. It can be done either online through Internet banking or offline by visiting the bank. If you have more than one account and you need to manage cash, say shift some to the account from which your equated monthly income gets debited or where you maintain emergency cash, NEFT is your friend. But did you know NEFT is now capable of much more?

NEFT has eased another painful transaction—paying stamp duty. When you take possession of a property, you need to register it in your name by paying a stamp duty. Through NEFT, you can transfer the money from your account to the account of Stock Holding Corp. of India Ltd (SHCIL), which is the central records-keeping agency for e-stamping, or an authorized collection centre (ACC). Three banks—Corporation Bank, Central Bank of India and Bank of Baroda—are also authorized to process your stamp duty payment. E-stamping is currently operational in Gujarat, Karnataka, Delhi-National Capital Region, Maharashtra, Assam, Tamil Nadu, Rajasthan, Himachal Pradesh, Uttarakhand and Union territories of Dadar and Nagar Haveli, Daman and Diu and Puducherry.

Once the cash gets credited into SHCIL’s account, the ACC issues the stamp certificate. Says Vikram Diwan, senior partner, Diwan and Co., a law firm that handles property related cases: “The ACC issues a unique transaction reference number or UTR code, which is a proof that you have submitted cash. By showing your UTR code, you can procure the e-stamp from the bank branch."

Contributions by Deepti Bhaskaran, Devesh Chandra Srivastava, Kayezad E. Adajania, Lisa Pallavi Barbora, Saurabh Kumar and Vivina Vishwanathan.

Also See

Electronic clearing service (ECS) (PDF)

Mobile payment (PDF)

National Electronic Funds Transfer (PDF)

Graphics by Sandeep Bhatnagar; illustrations by Shyamal Banerjee/Mint