Why is instant settlement not enabled by default ? What is the cost difference between T+2 and instant settlement?

Why is instant settlement not enabled by default ? What is the cost difference between T+2 and instant settlement?

As per standard industry practice, the settlement SLA is T+2 working days, where T refers to the transaction success date plus two working days.

Instant settlement is typically not enabled by default, as it involves higher transaction fees and additional compliance requirements from payment gateways.

We're currently using standard (T+2) settlement to maintain a balance between cost efficiency and reliability.


If you're considering instant settlement, here's a quick comparison to help you to decide:

  • Instant Settlement Cost: 0.3 % + GST of Total settlement amount

  • T+2 Settlement Cost: ₹ 0


So essentially:

  • If you're opting for instant settlement, you're paying 0.3 % + GST for early access to your funds.

  • If you are keeping the fund in your account or making FD’s then you may earn 0.019%, but instant settlement costs 0.3% + GST — that’s 5x more just to get funds early.

  • T+2 settlement is free or cheaper, just requires patience.


Conclusion:

✅ T+2 settlement is more cost-effective if you can wait for the funds.