Use Electronic Clearing Service for making regular payments

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 Electronic Clearing Service (ECS) is an automated fund transfer from your bank account to another. It takes away the pain of writing cheques, especially for those recurring payments again and again. It pretty much puts the cumbersome task of paying anything from your utility bills like mobile & electricity to OTT subscriptions to EMIs and SIP investments, on auto pilot. The ECS facility makes your life easier as you don’t have to stand in queues or remember the due dates of payments to be made: the bank takes care of this.

How does ECS work

First up you need to be registered for net banking with your bank of choice. Log into your account, go to Bill Pay & Recharge, choose the appropriate category and provide the necessary information on who you want to make your payments to. While doing that you will  get an option to fix the amount of ECS.  In fact, you can choose to set ECS for a minimum amount due as well as a maximum limit. For instance, if you set an ECS for your credit card bill with a maximum limit of ECS for Rs 10,000 and your credit card’s total amount due for the month is Rs 8,000, then an ECS of Rs 8,000 will run. Now keep in mind an ECS debit mandate is just like a cheque issued by you. This means, you need to ensure you have enough funds in the account, so that your ECS gets cleared. If you bounce an ECS, you will have to bear the same fines as you would have for a bounced cheque. And this could be as much as Rs 750.

Additional authentication

The Reserve Bank of India, in a circular on December 4, 2020, had asked banks to introduce additional factor authentication by March 31,   2021. The new guidelines will impact payments for electricity, water and phone bills, loan instalments, insurance premia, subscription charges for different OTT platforms. But many banks and financial service providers have not yet updated their systems to comply with the RBI directive and the deadline has now been shifted to September 30. After that date customers will have to give their consent before the bank can deduct any money from their accounts. Banks are expected to intimate their customers up to five days prior to payment date or at least 24 hours before it. ECS payment transactions of more than Rs 5,000 will need to be ratified by the customer through an additional one-time-password (OTP).