Payment rails

What a payment rail is

A payment rail is a shared system that banks use to move money for their customers. Each rail has an operator, a rulebook, a message format and a way of settling between banks. In India the main operators are the Reserve Bank of India (RBIReserve Bank of India. India's central bank. It regulates banks and payment systems, runs RTGS and NEFT, and holds the accounts in which banks settle with one another.), which runs RTGSReal Time Gross Settlement. RBI's system that settles each payment individually and immediately, on a gross basis, between banks. and NEFTNational Electronic Funds Transfer. RBI's account-to-account transfer system. It settles in half-hourly batches, around the clock, in banks' accounts at RBI., and the National Payments Corporation of India (NPCINational Payments Corporation of India. A not-for-profit company set up in 2008 as an initiative of RBI and the Indian Banks' Association, owned by banks. It runs retail payment systems such as UPI and the National Financial Switch.), which runs UPIUnified Payments Interface. NPCI's real-time system for paying from a bank account with a UPI ID, QR code or phone number, through apps on a phone., IMPSImmediate Payment Service. NPCI's instant, round-the-clock interbank transfer service, used with an account number and IFSC or with a mobile number., NACHNational Automated Clearing House. NPCI's system for bulk and recurring payments, such as salaries, dividends and loan instalments collected under a mandate., the card and ATM network, and cheque clearing.

Every payment has two parts. The message tells the banks what to do. Settlement then moves the money between the banks themselves, in the accounts they hold at RBI.NoteBanks hold current accounts with RBI. Moving money between those accounts is what settlement means on this page. This is why a customer can see a credit within seconds while the banks settle later.

The rails at a glance

To compare two rails side by side, choose them below. Without JavaScript, every rail is shown.

Gross and net settlement

Gross settlement moves each payment on its own, at once. It removes the risk that one bank’s failure strands everyone else’s money, but each bank needs enough money in its RBI account to cover every payment as it goes. Net settlement adds up what each bank owes and is owed over a period, then moves only the difference. That needs far less cash, but money stays in flight until the cycle closes, and a bank that cannot pay its net amount affects everyone in that cycle.

RTGS and NEFT

RBI runs both of the main account-to-account rails. The difference between them is the difference between gross and net settlement, described in payment system architecture. RTGS settles each transaction in real time on a one-to-one gross basis.^{1Institute for Development and Research in Banking Technology. About IDRBT. As of 1 January 2025.} RTGS is meant mainly for large-value transfers: the minimum is ₹2 lakh, with no upper ceiling.^{2Reserve Bank of India. Real Time Gross Settlement (RTGS) System: FAQs. As of 29 September 2026.} RTGS has been available 24x7x365 since 14 December 2020.^{2Reserve Bank of India. Real Time Gross Settlement (RTGS) System: FAQs. As of 29 September 2026.} Because each payment settles individually in RBI’s books, an RTGS payment is final once it is processed.

NEFT processes transactions received up to a set time in batches, while RTGS processes them continuously, one at a time.^{2Reserve Bank of India. Real Time Gross Settlement (RTGS) System: FAQs. As of 29 September 2026.}NEFT has been available 24x7, on all days of the year including holidays, since 16 December 2019.^{4Reserve Bank of India. Availability of National Electronic Funds Transfer (NEFT) System on 24x7 basis (RBI/2019-20/111). As of 6 December 2019.}When NEFT moved to 24x7 in December 2019, RBI set 48 half-hourly settlement batches a day.^{4Reserve Bank of India. Availability of National Electronic Funds Transfer (NEFT) System on 24x7 basis (RBI/2019-20/111). As of 6 December 2019.}A beneficiary bank must credit or return an NEFT transaction within 2 hours of the batch settling.^{4Reserve Bank of India. Availability of National Electronic Funds Transfer (NEFT) System on 24x7 basis (RBI/2019-20/111). As of 6 December 2019.}

IMPS and UPI

IMPS and UPI both credit the customer within seconds, at any hour, and both settle between banks later, on a net basis. IMPS came first and is used from bank apps and branches with an account number and IFSCIndian Financial System Code. An 11-character code that identifies a bank branch for NEFT, RTGS and IMPS transfers.. UPI added a simpler address, the UPI ID, and opened payments to apps that are not banks. In August 2026, IMPS handled 360 million transactions^{6Business Standard. UPI sets new record at 24.51 bn transactions in Aug, value at ₹29.82 trn. As of 31 August 2026.} and UPI 24.51 billion transactions^{6Business Standard. UPI sets new record at 24.51 bn transactions in Aug, value at ₹29.82 trn. As of 31 August 2026.}, about 791 million a day^{6Business Standard. UPI sets new record at 24.51 bn transactions in Aug, value at ₹29.82 trn. As of 31 August 2026.}.

Who takes part in a UPI payment

• The payer’s bank holds the account that is debited. It checks the UPI PIN and the balance.
• The app is where the customer starts the payment. It is either the bank’s own app or a third-party app provider (TPAPThird-party application provider. A UPI app run by a company that is not a bank. It connects to UPI through one or more partner banks that act as payment service providers.) that works through one or more partner banks, called payment service providers (PSPs).
• NPCI runs the switch that routes the request between banks and works out what each bank owes the others.
• The payee’s bank credits the person or merchant being paid.

When a customer first sets up an app, UPI ties the app to that phone and its SIM, a step called device binding. Each payment is then approved with the UPI PIN. The PIN proves the customer; the binding proves the phone.

UPI limits

NPCI sets ceilings on how much can move through UPI. Your bank and your app may set lower limits of their own.

Ways to pay with UPI

UPI has grown several variants on the same rails. AutoPayUPI AutoPay. The UPI feature for recurring payments under a mandate the customer approves once, such as subscriptions or instalments. lets a customer approve a recurring payment, such as a subscription, once. UPI LiteUPI Lite. A small on-device balance for quick, low-value UPI payments without entering the UPI PIN each time. See NPCI for current limits. keeps a small balance on the phone for quick, low-value payments without entering the PIN each time. UPI 123PAYUPI 123PAY. UPI for feature phones, used through voice calls, missed calls, simple apps or sound-based payments. brings UPI to feature phones through voice calls, missed calls and simple apps. NPCI publishes the current limits for each.

UPI is no longer only about bank balances. RBI announced on 8 June 2022 that credit cards, starting with RuPay, could be linked to UPI.^{17Business Today. Credit cards, starting with RuPay, can now be linked to UPI: RBI. As of 8 June 2022.} Since RBI's circular of 4 September 2023, pre-sanctioned credit lines at scheduled commercial banks can fund UPI payments, with the customer's prior consent.^{16Khaitan & Co. Credit lines on UPI: the next step towards digital financial inclusion. As of 4 September 2023.}

When a payment fails

A payment can end in three ways. It succeeds; it fails before any money moves; or it gets stuck, with the payer debited but the payee not credited. The third case is the one customers notice, and RBI sets rules for fixing it. A failed transaction is one not fully completed for a reason not attributable to the customer, such as a link failure, an ATM without cash or a session time-out.^{5Reserve Bank of India. Harmonisation of Turn Around Time (TAT) and customer compensation for failed transactions using authorised Payment Systems (RBI/2019-20/67). As of 20 September 2019.} RBI's framework for failed transactions, in force since 15 October 2019, sets outer time limits for reversal and requires compensation to be paid automatically, without a complaint.^{5Reserve Bank of India. Harmonisation of Turn Around Time (TAT) and customer compensation for failed transactions using authorised Payment Systems (RBI/2019-20/67). As of 20 September 2019.}

Bulk and recurring payments: NACH

NACH moves many payments in one go, such as a company’s salaries, dividends, or the monthly instalments a lender collects. Collections run under a mandate: the customer authorises a lender or biller once, and the bank then debits the account on each due date. Files are processed in batches, so NACH suits planned, scheduled money rather than urgent payments.

Cards, tokens and ATMs

Card payments run over card networks, including NPCI’s domestic network, RuPayRuPay. India's domestic card network, run by NPCI, for debit, credit and prepaid cards.. Online card payments changed in 2022. Since 1 October 2022, no entity in the card payment chain other than card issuers and card networks may store actual card data; merchants use tokens instead.^{18Reserve Bank of India. Restriction on Storage of Actual Card Data [i.e. Card-on-File (CoF)] (RBI/2022-2023/95). As of 28 July 2022.} A token stands in for the card number and works only for the merchant it was issued for, so a breached merchant database no longer exposes usable card numbers.

ATM withdrawals at another bank’s machine travel over the National Financial Switch. NPCI took over operation of the National Financial Switch from IDRBT with effect from 14 December 2009, under an RBI authorisation.^{10National Payments Corporation of India. Takeover of NFS by NPCI from IDRBT (NPCI/NFS/OC No.1). As of 18 December 2009.} The National Financial Switch connected 2.61 lakh ATMs of 1,317 member banks as of 31 July 2024.^{1Institute for Development and Research in Banking Technology. About IDRBT. As of 31 July 2024.}

Card networks must also keep payment data in India. RBI's circular of 6 April 2018 requires payment system providers to store the entire data relating to their payment systems only in India; data on the foreign leg of a transaction may also be stored abroad.^{19Reserve Bank of India. Storage of Payment System Data (RBI/2017-18/153). As of 6 April 2018.} RBI had earlier restricted American Express and Diners Club from onboarding new domestic customers from 1 May 2021 on the same grounds.^{20The Tribune. RBI bars Mastercard from adding new clients in India. As of 14 July 2021.} RBI barred Mastercard from onboarding new domestic card customers from 22 July 2021 for not complying with the payment data storage directions.^{21Business Standard. RBI restricts Mastercard from onboarding new domestic customers. As of 14 July 2021.} RBI lifted the restriction on Mastercard in June 2022 after satisfactory compliance with the data storage directions.^{22Reserve Bank of India. Restrictions on Mastercard lifted (press release). As of 16 June 2022.}

Cheques now clear within the day

The Cheque Truncation System (CTSCheque Truncation System. The system that clears cheques using scanned images instead of moving paper. Since October 2025 it clears continuously through the day.) clears cheques by image, so the paper never travels between banks. RBI asked NPCI to build the Positive Pay facility into CTS and make it available to participant banks, and refers to the CTS grids that NPCI runs.^{9Reserve Bank of India. Positive Pay System for Cheque Truncation System (RBI/2020-21/41). As of 25 September 2020.}

Large cheques get an extra check. Since 1 January 2021, banks must offer Positive Pay for cheques of ₹50,000 and above; using it is the account holder's choice, and banks may make it mandatory from ₹5 lakh.^{9Reserve Bank of India. Positive Pay System for Cheque Truncation System (RBI/2020-21/41). As of 25 September 2020.} The issuer tells their bank the date, payee and amount in advance, and CTS flags any cheque that does not match.

Bill payments: BBPS

The Bharat Bill Payment System (BBPSBharat Bill Payment System. An interoperable system for paying utility and other recurring bills through many channels.) lets customers pay electricity, water, telecom and many other bills through any participating bank, app or agent, with a common confirmation. Its value is interoperability: a biller connects once and can be paid through every channel on the system.

Messaging networks: SFMS, INFINET and SWIFT

Behind RTGS and NEFT sit a private network and a messaging layer. IDRBT launched INFINET, a closed user group network for banks, in June 1999; it now runs on MPLS.^{1Institute for Development and Research in Banking Technology. About IDRBT. As of 1 January 2025.} SFMS, a secure financial messaging platform, was launched on 14 December 2001 and is used by NEFT, RTGS and delivery-versus-payment settlement of government securities.^{1Institute for Development and Research in Banking Technology. About IDRBT. As of 1 January 2025.} IDRBT transferred INFINET, SFMS, the RTGS and NEFT systems and its banking community cloud to its subsidiary IFTAS in February 2015; IFTAS was transferred to RBI in 2019.^{1Institute for Development and Research in Banking Technology. About IDRBT. As of 1 January 2025.} For cross-border payments, banks use SWIFTSociety for Worldwide Interbank Financial Telecommunication. The global cooperative network banks use to exchange cross-border payment and other financial messages., the global cooperative network for financial messages.

Account Aggregators: moving data, not money

An Account Aggregator (AAAccount Aggregator. An RBI-licensed firm that moves a customer's financial data between institutions only with the customer's consent. It does not store the data.) is not a payment rail, but lenders now use it alongside the rails, for example to check a borrower’s bank statements with consent. RBI issued its Master Direction for Account Aggregators on 2 September 2016; an Account Aggregator must be a non-bank financial company registered with RBI.^{11Reserve Bank of India. Master Direction - Non-Banking Financial Company - Account Aggregator (Reserve Bank) Directions, 2016 (updated 6 September 2024). As of 6 September 2024.} No financial information is retrieved, shared or transferred through an Account Aggregator without the customer's explicit consent, and joining is voluntary.^{12Department of Financial Services, Ministry of Finance. Account Aggregator Framework. As of 29 September 2026.}

Three roles make it work. A financial information provider (FIPFinancial information provider. In the Account Aggregator system, an institution that holds a customer's data, such as a bank, and shares it on consent.), such as a bank, holds the data. A financial information user (FIUFinancial information user. In the Account Aggregator system, an institution that asks for a customer's data with consent, such as a lender. Not the same as FIU-IND.), such as a lender, asks for it. The aggregator carries the request and the encrypted data between them. Customer data passing through an Account Aggregator is not visible to, and does not reside with, the aggregator.^{13Securities and Exchange Board of India. Consultation paper on Financial Information Users in the securities markets under the Account Aggregator framework. As of 1 August 2023.} Financial information users in the Account Aggregator framework adopt technical specifications published by ReBIT.^{13Securities and Exchange Board of India. Consultation paper on Financial Information Users in the securities markets under the Account Aggregator framework. As of 1 August 2023.}

Which rail for which job

Live volumes for every system are published each month: see RBI's payment system indicators^{3Reserve Bank of India. Payment System Indicators (monthly). As of 29 September 2026.}.