E-NACH stands for electronic non-cash payment. It is an initiative by NPCI to make the process of recurring payments digital. With E-NACH, you can authorize your bank to debit a certain amount from your account automatically, at regular intervals such as monthly, quarterly or yearly.
E-NACH is an electronic mandate form that allows you to authorize recurring payments without any direct intervention. This way, you don’t have to visit your bank branch physically and submit the form manually. The process is completely digital and paperless.
The E-NACH service was launched on July 1, 2018 as part of Narendra Modi government’s initiative to promote cashless transactions in India. It was initiated after demonetization in late 2016 when people were forced to use digital payments because of insufficient cash availability in circulation.
What is an e-mandate?
E mandate, a payment gateway service will be available soon in India. This process is under the control of individual banks and is currently available across 4-5 banks in India. To go for e-mandate registration, the primary mode for payment is net banking, which implies that merchants with Aadhar linked bank accounts opting for credit cards can easily use this service.
What is e-NACH?
The process of registering through e-NACH is a new scheme introduced by the National Payments Corporation of India (NPCI), which can help banks, financial institutions and other government bodies to provide automated payment services. Under this facility, users can register their bank accounts for an account where the recurring account can be debited automatically within the time frame.
What are the advantages of e mandate/ e-NACH?
1. Recurring payments automation:
This new mandate is aimed at easing the process of making payments. Banks are demanding their customers to register themselves with e-NACH, so that they can establish an online link between the bank accounts of their customers and the companies’ systems. Once this link is established, all financial transactions (such as insurance premiums or fund SIPs) will be automatically debited from the bank account in a timely manner
2. Seamless capital infusion:
With e-NACH, you can avail the benefits of online NACH registration. With less effort and time, when you register your account with e-NACH/e-mandate, capital infusion of a specific amount from your registered account is done at a particular interval. This swift movement from paper-NACH to e-NACH has saved time and effort in the registration process and has made the process faceless, cashless, and paperless.
3. Customer retention:
E-Mandate integrates with the bank to auto-debit your customer’s account at the start of every billing cycle with just one-time digital authentication. This process reduces the burden on the customer to authenticate recurring payments regularly, thereby increasing productivity, team efficiency and productivity rate.
4. Secure transactions:
E-mandate or e-NACH through Easebuzz, your data is safe as it offers end-to-end encryption and is PCI compliant. In case of insufficient balance, the payment to the merchant is denied. You can avoid checking your monthly deduction from your account as the transaction is safe.
5. 24*7 e-Mandate registration
The E-NACH and E-Mandate process allows merchants and buyers to run recurring pay with QR code such as utility bills, telephone bills, insurance premiums, school fees, etc. For instance, if you sign up for investing in a SIP through an e-mandate process. You can schedule all premium payments through a simple online process at the start of the insurance period and avoid manual tracking before making any premium payments.