Cash Payment:- Payment can be made in cash for any purpose. Only the problem in payment through cash is, risk factor. You cannot carry the big cash with you. It is very difficult to keep huge cash with you. Cash payment is desirable for small or petty payments only. In India there is a rule that you can not make any payment in cash after a certain limit. In business transactions. Cash payments should be avoided as far as possible.

Payment by Cheque:- To pay through cheques is more popular method now a day. Maximum payments are made through cheques whether it is personal payments or commercial payments. No extra charges are paid for payments through cheques.

Payment by Demand Draft or Pay Orders:- These are the value paid instruments. Payment through demand draft or pay order is much more safer than cheques from the point of view of receiver.

RTGS:- (REAL TIME GROSS SETTLEMENT) Funds are also transferred through banker from one account to another account with other banks. The person, who is not having the facility of e-payment, can use this method. Banks charges some nominal amount for this type of service.

NEFT (NATIONAL ELECTRONIC FUND TRANSFER):- It is also same as RTGS. Only difference is that the smaller amounts are sent through NEFT and through RTGS, any amount can be transferred.

E-Payment:- Under this method, the funds are transferred through internet by the payer to the payee. These facilities are provided by the bankers to their account holders free of cost. Now a day, e-payment has become compulsory in certain cases for so many government payments in India. For example: Sales Tax, Excise Duty, Service Tax, Provident Fund, TDS, ESI etc.

Letter of Credit (LOC) :- In this case the banker of payer issues a letter to the payee that any amount up to a certain limit during a certain period subject to certain terms and conditions, can be paid to the payee. LOC is mostly useful in case of import of goods. The exporter presents the export bill to the banker of importer according to the terms and condition of LOC then the banker pays the amount to the exporter.

Postal Orders:- In India there certain payments which are paid through postal orders. These postal orders are issued by post offices in different denominations. Mostly the government payments in small amounts are made through postal orders in India.

Debit Cards/Credit Cards:- It is very convenient to pay through debit cards and credit cards. Only thing is that these cards are used in small payments only but now a day, these cards are very useful for common man.


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