#nach mandate

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What is eNACH Registration and How to Do It?

Digitization has now revamped the payments collection aspects, and the entire banking sector is now leveraging the benefits of it. Among the

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A Big Differentiation Guide on Nach Mandate and ECS Mandate

The National Automated Clearing House (NACH) is a centralised payment and transaction processing system, launched by the National Payments Corporation of India (NPCI). NACH was put in place to replace the ECS system to simplify and manage payments made in bulk across multiple banks. Furthermore, NACH will also manage recurring payments, such as insurance premiums, credit card bills and SIPs.

With NACH replacing ECS systems, it is important to understand the key differences between the two. The ECS mandate verification is done based on physicals, and is thus time consuming, while NACH is a robust mandate management system with a defined workflow, and takes comparatively less time.

Unlike ECS, NACH provides a unique mandate registration reference number, which can come in handy for future reference. Furthermore, the rejection ratio is high in ECS due to mandate related issues, while the paperwork involved in NACH is less, and thus the rejection ratio is comparatively less. Yet another major difference is the settlement period of the payments; the payment gets settled on the same day with NACH. However, it takes anywhere between 3-4 days for the payment to get settled with ECS.

Finally, unlike NACH, ECS does not feature a dispute-management system to resolve issues quickly and efficiently. The dispute-management system (DMS) in NACH ensures efficient creation, escalation and resolution of disputes with respect to mandates or payment transactions. Thus, NACH facilitates and ensures faster and efficient ways to process transactions for the users, as well as the service providers.