IMPS stands for Immediate Payment Service and is an electronic system for transferring funds in India. Launched almost 9 years ago, this system has functioned as the roadmap to launch FinTech that is used today. For instance, UPI is a form of IMPS that would not have been possible without this technology coming in first.

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While digital payments are slowly becoming more accepted in India, IMPS is one form of payment that seems to be very widely adopted by its citizens.

National Payments Corporation of India (NCPI) data shows that IMPS payments in India during the first financial quarter of 2018-19 had crossed over Rs 3,23,826.79 crore. This figure shows the doubling of these payments within a span of a single year as they stood at a mere Rs 1,74,419.45 crores during the first financial quarter of 2017-18.

Thus, as consumers, it pays to understand what this payment system is and how you can use it on a day-to-day basis. This article explores the benefits of IMPS for consumers and businesses alike.

What are the benefits of IMPS payments?

Think of the last time you conducted a transaction through your phone. Whether you were buying a new pair of shoes or were simply sending money to your family, the process was quick and occurred in real-time.

IMPS payments stand out from their predecessors NEFT and RTGS mainly because of this reason. While NEFT may process payments hourly, and RTGS payments occur within a specific time frame of 9am-2pm (which may vary from branch to branch), IMPS occurs as and when the customer wants it to. The following are some of the benefits of IMPS.

1. Transactions occur in real time; payments occur instantly

This is a feature that has contributed largely to consumer behavioural changes across India about shopping. Additionally, if one were to consider the on-demand economy, instant transactions are what facilitate such services the most.

Consumers and vendors have now learnt to expect quick, hassle-free payments at the drop of a hat. The benefits of this are not just limited to friends and family who may require money from the sender on an immediate basis due to an emergency.

The emerging freelance workforce of India stands to benefit from receiving instant payments from clients too. The quick nature of these payments ensures that all financial processes between customers and businesses stay dispute-free. 

2. The process is very simple

Often, the simplicity of certain processes is what contributes to its widespread acceptance. The same holds true for IMPS. When setting up beneficiary details for the first time, consumers must enter all the relevant details such as name, bank account number, IFSC codes or MMID numbers, and so on.

Depending on the bank you use, you may be able to transfer the required funds to a beneficiary within 30 minutes. Once the first transaction with the new beneficiary has occurred, all future payments are instantaneous.

Related Read – What is IFSC & Its Uses?

3. Different payment modes to suit all types of customers

Not all customers are entirely comfortable using their cell phones to conduct monetary transactions. Recognizing this, IMPS allows payments to be conducted across different modes: SMS, ATMs, bank account and IFSC codes, or through mobile numbers and MMID codes.

Thus, consumers can choose the mode that they find the most convenient and process their payments accordingly. This has gone a long way in ensuring a certain level of financial inclusivity.

4. There are no time constraints

NEFT and RTGS operate within banking hours. They are also subject to public holidays. However, this is not the case with IMPS payments. As the service works 24×7, consumers can send or receive payments at any given time.

5. Consumers can use multiple payments channels

While many consumers are now accustomed to making payments via their smartphones, IMPS functions on payment channels that do not require internet use as well.

Apart from net-banking and mobile banking, consumers can also use good old-fashioned SMS to facilitate payments. They can also do so by using ATMs. Therefore, consumers across all social classes can arguably use this form of payment.

6. Security measures are built-in

When it comes to money, consumers fear losing their funds by accidentally using untrustworthy sources. IMPS is a product of the NPCI and is as trustworthy and secure as you can imagine. In order to ensure that the right person is using a specific account, banks have put in various security measures and authentication processes in place.

From asking for PINs to sending OTPs to verify the consumer’s identity, banks ensure that no one can use your account to transfer funds without your permission. Moreover, as long as you enter the right information for the beneficiary’s details, you do not have to worry about the money getting lost along the way.

7. The process ensures secure payments

Each transaction goes through multiple rounds of verification before banks green-light them. As a result, IMPS is a very secure form of conducting financial transactions.

Features of IMPS  

  • Instant transactions: IMPS enables instant money transfers between bank accounts, 24/7, including weekends and holidays, making it a fast and convenient way to send money.
  • Easy to use: IMPS is a simple and user-friendly mode of transferring funds between banks. It can be done through a mobile phone, internet banking or even by visiting a bank branch.
  • Safe and Secure: IMPS uses two-factor authentication, i.e., MPIN and OTP, which adds an extra layer of security to transactions. This ensures that only the authorized user can initiate and complete a transaction.
  • Low-cost transactions: IMPS offers an affordable way to transfer funds as the transaction fees charged are relatively low compared to other modes of transferring money.Multiple Payment options: IMPS supports various payment methods, such as mobile banking, internet banking, MMID and even ATMs, making it a versatile platform for transferring money.

What restrictions on fund transfers apply to IMPS?

When compared to RTGS and NEFT, IMPS offers restrictions that keep in mind the needs of an average consumer looking to make generic payments. Have a look at the table below to compare the differences between the three:

Limit on Limit amount
Minimum transaction Re 1
Maximum transaction Rs 2 lakh, but may vary from bank to bank
Transaction fees The lowest transaction fee is Rs 5. The highest fee is Rs 25. However, taxes may also apply to the transactions

As you can see, while RTGS and NEFT may have higher upper limits, IMPS is most likely to serve consumers looking to meet their day-to-day transaction needs. The low minimum transaction amount means that you can use this system to pay your bills at your local Kirana (if the vendor allows you), shop through apps on your mobile phone, or send money to family.

How do I transfer money through IMPS?

The total volume of payments through this system reached 1,047.91 million from April – November 2018. The total value of these transactions was Rs 9654.30 billion, according to NCPI data.

IMPS fund transfers occur via four different modes of payment:

  • Through the bank account and IFSC code
  • Through a registered cell number and MMID
  • Through traditional ATMs
  • Through SMS

IMPS’s ability to integrate different payment modes has affected the way consumers conduct payments today. IMPS offers a key factor that keeps consumers hooked–user-friendly processes while transferring funds. This article explores how consumers can transfer funds through IMPS by using any of its modes of payment.

Transferring funds via IFCS codes and bank account numbers

Using IFSC codes and bank account numbers is the most commonly used payment method when it comes to IMPS. This method works for transferring money to anyone who has a bank account (irrespective of which bank they work with). Consumers need a working internet connection along with mobile banking or net banking in order to conduct transactions. In order to transfer money, you must:

Enter your password to log into your account

Select the beneficiary you wish to transfer funds to or add a new beneficiary, as required. To add a beneficiary, you must enter the person’s details as requested in the form you may see on the screen. The details will include name, bank account number, IFSC code and so on.

You may also receive an OTP via SMS to verify the addition

Enter the amount you wish to transfer

Verify that all details are correct. If you send money to the wrong person, you cannot undo it without getting in touch with the person!

Confirm the payment by clicking the send or confirm button

Once these steps are carried out, the appropriate fund amount will be transferred from your account to the beneficiary’s account within seconds. It is important to note that the process may take longer if you are transferring funds to a new beneficiary for the first time.

Depending on your bank, the process can take anywhere between 30 minutes to 2 hours. However, this delay only occurs for the first time. Once the transfer is successful, subsequent payments occur within seconds.

Transferring funds via MMID and cell numbers

In order to transfer money through your cell phone number, you must first register your number with your bank. Nowadays, this can be done online. However, should you require assistance or have queries, you can always initiate the process at your nearest bank branch.

Once you register the number, your bank will give you a 7-digit MMID code. This code is essential for initiating IMPS transfers through this process.

Once you have the MMID number, you can transfer funds by following these steps:

  1. Enter your password to log into your bank’s mobile banking app
  2. Click on the fund transfer section to open it and select the IMPS option
  3. Enter the beneficiary’s details such as account number, MMID code, and mobile number
  4. Verify the transaction by entering the OTP sent you to via SMS. You can also use an MPIN to verify the transaction

After you have completed these steps, you will receive an SMS from your bank confirming the transfer for funds. The beneficiary may also receive a message regarding the inflow of funds from your account.

Transferring funds via ATMs

This is perhaps the least popular form of payment, as one requires the beneficiary’s debit card number to initiate it. Most people do not feel comfortable sharing their debit card details (unless the funds are being transferred by a family member), which is why this payment mode is not as well liked as the others mentioned in this article.

However, transferring your funds via ATM is as safe as the other methods. Consumers must be careful about sharing debit card details with strangers!

To transfer funds via ATMs, you must:

  1. Swipe your debit card and enter the 4 or 6 digit PIN to verify that you are the right user
  2. Select the option that says ‘Funds Transfer’
  3. Select the IMPS option on the screen
  4. Enter the beneficiary’s details, as requested by the form on the screen
  5. Enter the amount that you want to transfer and then confirm it by clicking the confirm button or send button

You will receive a text message confirming the transfer of funds. If you plan to use this method, you must keep in mind your bank’s daily limit on ATM fund transfers. These limits vary from bank to bank and it is best to consult their website for the same.

Transferring funds via SMS

In order to send funds via SMS, you must know the exact format that your bank requires to initiate the transfer. You will find your bank’s format on their website and you can use a screenshot of the same for reference if you need to transfer money and do not have a working internet connection. Once you follow the steps, you will receive an SMS that confirms that the funds have been transferred.

Of course, if you are looking to send exorbitant amounts of money, NEFT and RTGS may be the way to go. The downside will be the time constraints you must operate within.

Here’s a snapshot of what you need to initiate IMPS payments:

IFSC/Bank account Mobile/MMID ATM SMS
IFSC code Yes No No Yes
Bank account number Yes No Depends on bank No
MMID No Yes No Yes
Registered mobile number Yes Yes Depends on bank Yes
Debit card No No Yes No
Internet Yes Yes No No


IMPS has not only changed consumer behaviour and expectations but has also paved the way for newer forms of instant payment systems to operate in India. The fact that consumers can use this system without needing a smartphone adds to its financial inclusivity, making it a great payment option for the masses!

Frequently Asked Questions

1. What is IMPS? 

IMPS (Immediate Payment Service) is an electronic fund transfer system that enables instant money transfer between bank accounts.

2. What is MMID? 

MMID (Mobile Money Identifier) is a 7-digit unique number issued by banks to their customers for using IMPS services.

3. How does IMPS money transfer work?

IMPS works through a mobile application, internet banking or ATM to transfer money instantly 24/7.

4. What beneficiary details the customer requires to effect an IMPS remittance from Person to Person? 

To send an IMPS remittance from Person to Person, the customer requires the beneficiary’s mobile number and MMID or account number and IFSC code.

5. Is there any limit on the value of transactions in IMPS? Please give some examples. 

IMPS transactions have a limit of up to Rs. 5 lakhs per day but different banks have varying limits.

6. How does an IMPS user send money?

An IMPS user can send money through their bank’s mobile application, internet banking or ATM.

7. Will the client receive a refund if the transaction is not successful? When? 

Yes, if the transaction fails, the client will receive a refund.


Writer. Payments enthusiast. The most curious person in the room.

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