With the advent of computers, network technologies and electronic communications a large number of alternative electronic payment systems have emerged. These include ECS (Electronic Clearing Services), EFT (Electronic funds transfers), Real Time Gross Settlement system (RTGS) etc.

1. Electronic Clearing Services (ECS):

Electronic Clearing Service can be defined as repeated transfer of funds from one bank account to multiple bank accounts or vice versa using computer and Internet technology. Advantages of this system are bulk payments, guaranteed payments and no need to remember payment dates. ECS can be used for both credit and debit purposes i.e. for making bulk payments or bulk collection of amounts.

2. ECS credit:

ECS credit is used for making bulk payment of amounts. In this mode, a single account is debited and multiple accounts are credited. This type of transactions are Push transactions.

Example:

if a company has to pay salary to its 100 employees it can use ECS credit system than crediting every employees’ account separately.

3. ECS debit:

ECS debit is an inverse of ECS credit. It is used for bulk collection of amounts. In this mode, multiple accounts are debited and then a single account is credited. This type of transactions are Pull transactions.

Example:

The insurance premium of bulk number of customers

4. Electronic Funds Transfer:

Electronic Funds Transfer (EFT) is the “electronic transfer” of money over an online network. The amount sent from the sender’s bank branch is credited to the receiver’s bank branch on the same day in batches.

5. Real Time Gross Settlement:

Real Time Gross Settlement system (RTGS) is a payment system particularly used for the settlement of transactions between financial institutions, especially banks.

Real-time gross settlement transactions are:

1. Unconditional –

the beneficiary will receive funds regardless of whether he 242 fulfills his obligations to the buyer or whether he would deliver the goods or perform a service of a quality consistent with the order.

2. Irrevocable –

a correctly processed transaction cannot be reversed and its money cannot get refunded (the so-called settlement finality).