Did you know the difference between NIP and NEFT funds transfer?…
THERE are different types of funds transfer services and it is important for bank customers to understand the differences and implications.
Fund transfer is when you send money to person or persons from your bank account using a transfer channel. You can transfer funds to people living within and outside the country using various transfer channels.
Well, By the end of this my little story you will have an idea what am talking about…
A few months back I needed money urgently to purchase something online so I need to add some funds to top the one in my first bank account, I made fund transfer from GTB account little did I know I choose NEFT instead NIP, Boom transaction was made but not funds enter the expected account, damn it; I was sure of my Account Number.( my heart was palpitating like a man with his wife at labour room to deliver their first child).
The Good News, when I reach out to them on Twitter, I was clarified.
There are Three Types of Fund Transfer:
1).Types of Fund Transfer Manual funds transfer:
This is performed in the banking hall. The sender visits the bank of the receiver, fill out a fund transfer form which specifies the account number of the receiver and the amount to be transferred.
2). Electronic funds transfer:
The electronic funds’ transfer is the transfer of money from your bank account to another bank account through computer-based systems. Such transfer can take place within your bank or across multiple banks.
Nigeria Interbank Settlement System (NIBSS) Electronic Funds Transfer (NEFT), NIBSS Instant Payment (NIP), Point of Sale terminals (PoS), Automated Teller Machine (ATM) and Unstructured Supplementary Service Data (USSD).
3). Online/Internet funds transfer:
This is when sending money from your account to another bank account through the internet. You will need an internet-enabled computer or phone to transfer such fund. Examples of Internet fund transfer channels are Central Bank of Nigeria’s Real Time Gross Settlement System (RTGS), Western Union Money Transfer, Stanbic IBTC Bluepay, GTpay, Mastercard Internet Gateway Service (MIGs), Zenith GLOBAL PAY and so on.
NEFT and NIP The Nigeria Interbank Settlement System Electronic Fund Transfer (NEFT) and Nigeria Interbank Settlement System Instant Payment (NIP) are examples of electronic funds transfer. They are irrevocable funds transfer instruction. You must have a bank account to be able to use NEFT or NIP to transfer funds.
How does it work?
You can transfer funds through NEFT by first logging into your bank’s internet banking platform using your ID and password. Then you go to fund transfer tab and select add beneficiary (receiver’s bank). Select beneficiary type for example transfer to other banks then enters the account number of the beneficiary. Click on send. The bank will first debit your account to ensure that the funds are set aside. Then your instruction (along with other customers’ instructions) are sent to NIBSS by your bank as an electronic file for onward processing.
For NIP, if you are using your personal computer log into your bank’s internet banking platform. Click account transfer tab to expand it. Click on transfer to other banks (instant). If you are using mobile money android application, select NIP. If you are using it for the first time activate it with your token. Then click new request. Select add a new beneficiary to add the receiver’s bank account details. Fill all required details and enter the code from your token device. Then send. Transfer to other banks will incur charges.The options of NEFT and NIP are also provided in the funds’ transfer forms in the banks. Hence you can perform any of the two by visiting your bank and complete the funds’ transfer, indicating NEFT or NIP as your preferred transfer type.
Different Between NEFT and NIP
The differences between NEFT and NIP Despite the similarity of both products, they differ in terms of processing timeline and limits of transfer.
For NIP the recipient get the value within 10 minutes after the sender has made the transaction (barring network failure).
For NEFT the receiver gets the value the next day (sometimes up to 24 hours) after the sender has executed the transfer. You can use NEFT for bulk transfer, which is funds transfer to many recipients at the same time. However, NIP can be used only to transfer money to one or two people at the same time. Also, NIP has a maximum limit of N5 million for transfer to individual and N10 million for transfer to the corporate body.
What to Know About the NEFT Funds Transfer:
For NEFT, you can transfer as high as N100 million. Risk of fund transfer The risk electronic fraud is very high with funds transfer. However, there are specific tactics that can protect you from falling victim of fraud. First, don’t be careless with details of your ATM card, and don’t respond to any email or text message asking you to provide such details. Most importantly, you should have the telephone details of your bank’s contact canter, and promptly inform them about any suspicious transaction on your account. You should also be attentive to the security of your network.
Update your anti/virus and anti-spam programs to protect you from falling victim of fraud. First, don’t be careless with details of your ATM card, and don’t respond to any email or text message asking you to provide such details. Most importantly, you should have the telephone details of your bank’s contact canter, and promptly inform them about any suspicious transaction on your account. You should also be attentive to the security of your network.
Update your anti/virus and anti-spam programs to prevent attacks from emails with infected attachments. Set your browser appropriately to prevent accidental or unwanted downloads.