Let's start with some definitions.

• NACH Debit eMandates (also known as eNACH): A payment system authorised by RBI under the Payment and Settlement Systems Act, operated by the National Payments Corporation of India (NPCI), centrally cleared, with robust legal framework, and creditor ownership of mandates.
• Direct eMandates (also known as internal mandates): A solution operated by some banks and aggregators, with bilateral clearing arrangements, with uncertain legal framework, and aggregator ownership of mandates.

So how do these two payment modes compare? In summary, NACH Debit eMandates are far superior to Direct eMandates. As the NACH solution evolves over the next few months, the Direct Mandate solution will become redundant and will die out. Read on for details.

Status: As of December 2018, NACH eMandates are live with several destination banks, with new banks being added every week. Direct eMandates are live with State Bank of India, HDFC Bank, Axis Bank and ICICI Bank, and no other banks are planning to offer this solution. By February 2019, NACH eMandates will be possible for all these banks and more, thus rendering Direct eMandates redundant.

Clearing System:

Modes of authorisation:

Both solutions offer net-banking login as a mode of authorisation. NACH eMandates also offer debit card and PIN, which gives a much broader reach. Currently SBI is developing this mode in NACH eMandates, and by the end of 2019 it is expected that all the leading banks will offer this mode in NACH eMandates.

User experience: In both solutions, the customer is redirected to their bank's website, where they are required to authenticate themselves by logging into net-banking with username and password, or by entering debit card and PIN details, and then authorising the eMandate.

Population reach: As more destination banks go live on NACH eMandates, it's expected that by the end of 2019 approximately 400 million customers can authorise eMandates.