Electronic Payment and Receipts Framework

Reviewed by Sweta | Updated on Jul 26, 2021



Electronic payments and receipts refer to payments and receipts made using digital means or technology. The transactions of receipts and payments do not involve the physical transfer of cash, payment by paper cheques or demand drafts.

The technology platforms used for electronic receipts and payments are called fintech platforms. Digital payment platforms are offered by various fintech companies and by banks.

Understanding Electronic Payments and Receipts

Traditionally, receipts and payments were made in the modes of cash (physical means), bank cheques, demand drafts, or promissory notes. These methods are still followed based on the specific nature and mode of business.

Slowly, people adopted direct bank transfers made under the instructions of the remitter. These include NEFT (National Electronic Funds Transfer), RTGS (Real-Time Gross Settlement), and IMPS (Immediate Payment Service).

The other modes of payment include debit cards and credit cards. While debit cards instantly deduct funds from the customer’s account, credit cards offer a limited credit period free of interest from the date of the transaction to the next bill due date.

With a revolution in technology and the advent of digital payment systems, various modes of electronic payments were launched:

  • Virtual credit cards were created for online transactions. The card is based on a primary credit card, has a transaction limit and enhanced security features. However, it is not a physical credit card.

  • Automated Clearing House (ACH) transactions include inter-bank transfers executed online. These transactions are based on the net banking transfers by a remitter.

  • E-wallets enable customers to add their credit card and debit card details to an e-wallet account. The e-wallet uses a security code at the time of set up. Customers can store their money on e-wallets for making online payments for groceries, any other goods or services, and transferring to the e-wallet accounts of any other person.

  • Based on the digital platform, several banks, payment service providers, and service providers also developed their own app-based payments platforms.


The digital or electronic modes of payments and receipts provide ease of transfer, instant transfer, reduce the use of paper money among the several benefits to a user. The app-based platforms provide ease of access and security of data, unlike bank cheque books.

From a business perspective, electronic system of transactions streamlines the purchase, sales, and payments removing multiple data entry errors.

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