As the name suggests, Immediate Payment Service (IMPS) is an instant payment system provided by the National Payment Corporation of India (NPCI). The system helps initiating inter-bank electronic funds transfers through a safe and secured digital platform. Unlike NEFT and RTGS payment systems, IMPS is operational 24*7 throughout the year including weekends and bank holidays.
The NPCI initially launched the mobile payment system on pilot basis in 2010 with just 4 member banks – State Bank of India, Union Bank of India, Bank of India, and ICICI bank, but soon Yes Bank, Axis Bank, and HDFC bank too joined the league later that year. The system was publicly launched on November 22, 2010 and at present, there are more than 53 commercial banks with over 100 rural/ district/ urban and cooperative banks.
Due to its convenience and handy presence, the system got a major hit with around 200 million IMPS transaction worth $20 billions (roughly) initiated every month in India. In order to initiate the transfer, a sender is required to have the beneficiary’s bank account details and IFSC code of bank branch.
Key Features of IMPS transfers:
Since the day IMPS mobile transfer system was launched, it received a positive feedback from the masses, making it the most convenient mode of payment.
Flexibility – When it comes to initiating mobile payment transfers, IMPS transactions are highly flexible due to certain aspects such as availability, multi-platform support, and versatility. Its 24*7 and 365 days availability is the unique selling point where an individual can initiate a transfer without personally visiting the bank branch. In addition, the system is designed in such a way that it supports different mobile platforms including Android, Windows, and iOS. Another aspect of IMPS is its versatility. The payments can be initiated in both P2P and P2M modes. IMPS can be used for making payments for different purposes such as online shopping, utility bill payments, OTC payments, insurance premium payment, ticket booking and hotel reservations.
User-friendly interface – When compared to other modes of online fund transfers, Immediate Payment Service has quite a user-friendly interface. A sender is just required to enter beneficiary’s mobile number linked to recipient bank. Therefore, a person requires no additional skills and can initiate the transfer with so little information.
Quick money transfer – IMPS system was purposely designed to make instant money transfers and thus, this is another key feature of inter-bank electronic fund transfer system. Payments are settled immediately as soon as they are initiated. Even if the bank server is down or any technical error occurs, it doesn’t takes more than 30 minutes to settle the payment.
Affordable charges – The bank levies IMPS charges per transaction, subject to the amount of transfer. In general, Rs.2.50 is charged for transaction value of up to Rs.10000, Rs. 5 for transfers between Rs.10000 and Rs.1 lakh, while Rs.15 is charged for transfers above Rs.1 lakh. However, fees and charges are subject to change as per bank’s notification. It may be noted that maximum transaction limit via IMPS is Rs.2 lakh.
Safe and secured platform – Despite its multi-platform support, IMPS transfers are initiated through highly secured payment gateways. The servers have firewall protection and the data is encrypted to ensure complete safety and security to the user’s data. In addition, IMPS doesn’t require any confidential data of both the sender and receiver such as account number or IFSC code, thus, it is highly safe and secure to initiate a payment.
Mobile alerts – While initiating IMPS transfers, one can surely rely on its digital system. As soon as the transaction is initiated, the bank sends mobile alert or notification to both the sender and receiver informing about the transaction details. This gives a sigh of relief to both parties as if anything fishy happens, they will be alerted by the bank.
Difference between IMPS, NEFT, and RTGS transfers
Over the past decades, different payment systems are introduced in India making the payment transfer a lot easier and faster than ever before. The days are gone long back when an individual had to pay a visit personally to the bank branch, in order to request fund transfers. Today, accountholders can initiate a transfer through digital platform and settle the payments within no time.
However, when it comes to making online payments, most people are confused as which mode payments can be made through – NEFT, RTGS, or IMPS? In order to decide the mode of transfer, it is significant to note down the key differences of all three payment modes.
National Electronic Fund Transfer (NEFT) – NEFT is an inter-bank fund transfer system where payments are settled in 12 batches between 8 am to 7 pm on weekdays and in 6 batches between 8 am to 1 pm on Saturdays except Sundays and bank holidays. However, as per RBI’s new notification in 2019, NEFT payments can now be settled 24*7.
Real Time Gross Settlement (RTGS) – As the name suggests, the payments are settled on real-time basis in RTGS system. As soon as the transaction is initiated, funds get credited to the recipient’s bank account. Although there is no maximum cap to the transaction value, the minimum cap for RTGS transfers is Rs.2 lakhs.
Immediate Payment Service (IMPS) – Immediate Payment Service or simply IMPS is known for its features like fastest transfers and user-friendly interface. IMPS transfers are widely used by most commercial banks to deliver an unmatched banking experience to its users. Unlike NEFT and RTGS transfers, IMPS payments are settled instantly. Moreover, IMPS charges are quite low when compared to those charged for NEFT and RTGS transfers.