16 Hidden Charges you’re paying if you don’t implement Vendor Payment Software

When you have multiple accounts payable, you might think of using the services of your traditional big bank to complete the process instead of using a smart vendor payment software. At the end of the month when you look at your balance sheet, you realize something isn’t right. You would recognize some transactions that you never made! Neither was any SMS/email alert sent to you regarding the debit of these amounts. On further checking the details, the transactions contain some terms which you do not fully understand. Many Startups & SME business owners find themselves in a very similar situation.

For a business owner, it becomes a rather painstaking process to understand all the hidden charges levied by the bank since there are just so many accounts payable and transactions to handle. Many times, businesses can be charged on a recurring basis without even having any idea they’re being charged! This is what creates a cash flow deficit in the long run and ultimately hampers business growth.

Do not worry! We at Karbon have taken the effort to put together a list of all the hidden charges and fees that Indian banks take from all their customers, regardless of the size of account.

List of all hidden charges you might pay if you don’t use A Vendor Payment Software

1. Not maintaining your minimum balance

Banks charge you a certain “penalty” if your account balance goes below the minimum requirement agreed upon, while opening the bank account. This can vary from customer to customer. For each default, you may be charged any amount ranging from Rs 200 to Rs 500 per default case.

2. Bank visit transactions

Banks inherently want to discourage users from transacting in their physical branches because this process is much more expensive for the bank rather than an ATM or online transaction. Some banks charge Rs 50 to Rs 200 for this service!

3. Online funds transfer

Because banks need revenue to operate and maintain their physical branches, they charge a certain amount of fee even off online money transfer methods like RTGS or NEFT. This amount is typically between Rs 5 to Rs 25 per transaction.

4. Annual card fee

Based on the card, banks charge a certain amount of fee that varies from Rs 100 to Rs 500 based on the slab. Additional charges are levied for any additional cards under the same account.

5. ATM Usage

RBI has now allowed banks to charge their customers anywhere between Rs 8 to Rs 20 in its new notification. This amount changes based on the type of transaction.

6. Email/SMS alerts

What was started as an effective security feature has also opened up a revenue stream for the banks. Banks may charge you Rs 15 per quarter for these automated alerts.

7. Bounced cheque

If a cheque bounces, the penalty is levied on both – the person who issued the cheque and the person who submitted it. This amount ranges from Rs 100 to Rs 500 per failure.

Additionally, here are some more hidden charges that banks love to keep from you – 

8. Cheque cancellation (stop payment request)

Rs 50 to Rs 100

9. Requesting for an extra Cheque book

Rs 30 per book after a fixed number of books

10. Recurring payments

one time fee + recurring fee charged. Failed attempt costs you upto Rs 225.

 11. Replacing debit card

Rs 500

 12. PIN number resetting

Rs 50 + taxes

 13. Balance certificate

Rs 100 to Rs 500

 14. Closing of the bank account

Upto Rs 500 for early closing

 15. Branch transfer of bank account

Rs. 100 per instance

 16. ATM card/Kit returned by courier because of wrong address

Upto Rs 100

While this lists all the possible charges, it is possible that your partner bank does not levy some of these charges. All or most of these charges are applicable by the big traditional banks, that have outdated vendor payment software.

With the exponential “fintech” revolution in India, there has been a shift in customers utilizing traditional banks for their banking needs. The biggest advantage of selecting a digital entity as your banking partner is the NO HIDDEN FEE model. Since these entities do not have any physical liabilities, it becomes very easy for them to digitally deliver a great banking experience with zero bottlenecks and inefficiencies. This also means that there are lower costs involved in the upkeep of their products and services.

That said, allow us to introduce Karbon Payout.

What does Karbon charge its customers for making payouts?

NOTHING. 

Karbon payout is absolutely free to use with no hidden fees and charges. All Karbon customers can use the Payout tool without having to pay any fee for using the service.

This saves a lot of time and also money for Startups and SMEs that have small-value recurring bulk payments. Thousands of companies have already moved to Karbon Payout and they are loving it. Move to Karbon today and avoid all hidden fees charged by your bank.

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Written By

Nikitha Reddy
Growth VP @ Karbon

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