Do you pay an EMI, monthly utility bill or insurance premium? It just gets automatically debited from your bank account, right? Saving you the bother of having to remember the due date every month. But if you remember, life wasn’t this easy a few years ago. These payments were cumbersome, time-consuming, and involved tedious paperwork, which sometimes led to errors and delays.
Then came this amazing technology called e-NACH, and it made the process of recurring payments simpler, speedier, and secure. If you’re wondering what e-NACH meaning is, this article explains e-NACH in detail and how it has revolutionised payments.
What Is E-NACH
e-NACH’s full form is Electronic National Automated Clearing House.
Sounds complicated, but it isn’t. e-NACH, is an automated, electronic payment system that makes recurring payments seamless and hassle-free. It helps banks, financial institutions, insurance providers, and government agencies across the nation track and clear debits and credits for EMIs, insurance premiums, SIPs, subscriptions, bill payments and other monthly payments. e-NACH is a digital framework controlled by NPCI (National Payments Corporation of India).
Now you may have also heard of e-Mandate and may have a few questions. What is e-NACH Mandate? Is there a difference between e-NACH and e-NACH Mandate? To answer your questions, both these services make automatic recurring payments possible. However, e-NACH is managed by NPCI and works with 40+ banks, while e-Mandates are run by individual banks and are available in just 4-5 banks.
Advantages of e-NACH
e-NACH is a boon not just for financial institutions but also for customers like you and me. Here’s how:
Convenience: In pre-e-Nach times, you had to remember payment due dates and manually initiate payments. Now e-Nach does this for you through auto debits, saving you expensive penalties or worse, your policy lapsing due to missed payments. You’re also saved the embarrassment of constant reminders.
Flexibility: Want to change your premium payment schedule? Or upgrade or cancel a subscription? e-Nach gives you the flexibility to choose the payment schedule that suits you best, whether it's a one-time payment or a recurring payment plan.
Security: Each e-Nach transaction is digitally authorised and encrypted, which reduces the risk of data breaches.
Cost-effectiveness: As the costs of paper and printing are considerably reduced, service providers can pass on the benefit to their customers in the form of reduced rates. Being automated, e-Nach improves efficiency and reduces the administrative burden leading to faster processing time.
e-NACH registration process
You can register for e-NACH to set a recurring payment for your IndiaFirst Life Insurance policy. The e-NACH process is as follows:
1. Click here to register for eNACH - fill in your policy number and date of birth and hit the continue button post the SMS verification.
2. A form with drop down options will appear. Select your bank, input account number and IFSC code.
3. Click the Proceed button.
4. You will be redirected to your bank’s website.
5. Log in to your account and approve the mandate via OTP.
6. On successful verification of the OTP, you will be redirected to the IndiaFirst Life website with a confirmation message.
7. Your registration is complete.
Difference Between NACH And E-NACH
NACH is when you give your bank written permission to take money from your account electronically through NACH; it requires paperwork. In e-NACH, you allow the bank to do this electronically without needing a physical form or signature.
eNACH streamlines the process of authorizing banks to electronically auto debit funds from your account. With the convenience of digital authorization, it simplifies recurring payments, reducing paperwork and enhancing efficiency for both customers and banks. Going ahead, the tech may evolve into something far superior but for now, we have a lot to thank technology for.
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