The full form of IMPS is 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.
How to Register for IMPS in 2023
In order to register for IMPS all you need to do is:
- Register on the mobile banking service provided by your bank.
- Make sure you have the Mobile Money Identifier (MMID) and mobile banking personal identification number (MPIN) from your bank. For a successful transaction ensure that the recipient and the beneficiary have them.
- Download your banking mobile application from your bank to utilise the SMS facility if your bank has an SMS IMPS facility.
Steps to Send Money Using IMPS in 2023
To transfer money, there are several methods available, such as internet banking on a laptop, desktop, or tablet. Smartphones can be used for net banking, mobile applications, SMS with mobile phones, and via your ATM card. To make an IMPS transfer all you need to do is:
- Choose the channel you prefer and log in with your credentials.
- Enter the account number, Indian financial system code (IFSC), Aadhaar number, or the MMID and mobile number of the beneficiary.
- Enter the amount you want to transfer.
- Enter the reason for the money transfer request.
- Enter your personal identification number (PIN) to authenticate the request.
- Once the transaction is initiated successfully, the sender and the beneficiary will receive a confirmation through SMS.
IMPS transaction requirements and participants
To make a successful transaction, there are a few requirements that need to be met. To begin with your mobile number needs to be registered with the bank and needs to access basic mobile banking services. After the registration is done, you will get MMID and the MPIN number provided by your bank.
The MMID is a 7-digit identification number and the MPIN is a four-digit number password that applies for mobile banking.
You need to add the beneficiaries to your account and link their account details with your registered mobile number and obtain their MMID from your bank.
The beneficiary is required to submit an Aadhaar number, IFSC, bank account number, mobile number and MMID details to make an IMPS transaction.
IMPS transactions have three main participants, and are as follows:
- Remitter – Remitter bank/Prepaid Payment Instruments (PPI)
- Beneficiary – Beneficiary bank/PPI
- National Financial Switch – National Payments Corporation of India (NPCI)
Features of IMPS
The top 5 features of IMPS include:
- Safe and Secure: IMPS transfers are safe and secure, ensuring that your money is protected during the transaction process.
- User-Friendly: IMPS is user-friendly and can be accessed through any smart device with an internet connection, making it easy to use on the go.
- Quick way to transfer money: IMPS is one of the fastest modes of money transfer between bank accounts, with the amount instantly credited to the recipient without any delays.
- No Need for Bank Details: With IMPS, customers don’t need to share bank details like bank account numbers to make transactions, making it a convenient and hassle-free option.24×7 Service: IMPS is available as a 24×7 service throughout the year, allowing you to make transactions at any time.
IMPS Charges As Of 2023
The following are the charges applicable for IMPS excluding applicable Goods and Service Tax (GST) . Rupees 2.5 will be charged for transactions up to INR 10,000, Rupees 5 for transactions between INR 10,001 – INR 1 lakh and Rupees 15 for transactions between INR 1 lakh – INR 2 lakh.
Business Uses of IMPS
1. Fund transfer
IMPS offers two ways to initiate fund transfers:
Mobile Number and MMID: For this option, both the sender and receiver must have registered their mobile numbers with their respective banks. The mobile number and MMID are linked to a unique account number.
Account Number and IFSC: If the receiver’s mobile number is not registered with their bank, the sender can still use mobile banking to transfer funds by entering the recipient’s account number and IFSC.
2. Commercial transactions
Check Transaction Status: Senders can easily check the status of any transaction by initiating a check status request.
Name Inquiry: The IMPS service also allows for name inquiry using the recipient’s bank account number, IFSC, MMID, and mobile number.
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.
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.
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 – IFSC Code Meaning
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.
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.
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.
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:
|Minimum transaction amount||Rs 2 lakh||Re 1||Re 1|
|Maximum transaction amount||No upper limit has been placed on RTGS transactions||Transaction limits vary from bank to bank||Transaction limits vary from bank to bank|
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.
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.
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. Is a bank account required for a client to use IMPS?
Yes, the customer needs to have a bank account with a bank that has enabled the IMPS facility.
2. Does IMPS offer the facility to stop payments on IMPS?
No, it does not let you stop a payment after initiating the payment request since IMPS is an immediate fund transfer service.
3. Where can I file IMPS-related complaints?
You can file complaints for IMPS transactions with the NPCI using their website.
4. What will happen if I send money to the wrong bank account?
In the case of an intra-bank transaction, the bank will directly contact the incorrect recipient and request the reversal. However, if the transfer was made to a different bank, your bank will assist you by providing the necessary information about the incorrect recipient’s bank and branch.
5. What happens if an IMPS transaction runs out or fails?
If an IMPS transaction fails and the customer’s account is debited but the beneficiary’s account is not credited, an automatic reversal should be initiated within one day after the transaction date.