The full form of IMPS is Immediate Payment Service. It is launched in 2010 by Indian government and is facilitated by NPCI (National Payment Corporation of India). As the name suggests, it completes transactions immediately. It is a service which allows you to make payments using your mobile number. It uses mobile number or Aadhaar number to connect to bank accounts and complete payments. Hence, it is a secure method for transferring funds. The services of IMPS are available 24X7 and even on holidays.
Almost every big bank is the part of IMPS. The customers of SBI, HDFC, PNB, Canara, BoB, ICICI Bank, Axis bank and other banks can use the IMPS fund transfer facility.
How It Works
IMPS uses mobile number or Aadhaar number to connect with a bank account. When you send money to anyone using IMPS, it first connects you to your bank account using your mobile number. Unlike NEFT and RTGS, it does not transfer funds directly to the beneficiary’s account. But it first transfers funds from your account to your mobile number. Then it transfers that fund from your mobile number to his/her mobile number. And at last from beneficiary’s mobile number to his/her account.
The Benefits of IMPS
- You can send money in real time. Money will be credited in Beneficiary’s account within a few seconds.
- IMPS is safe, secure and cost effective.
- No minimum amount limit on transactions. You can even transfer ₹ 1 only with IMPS.
- IMPS is available 24X7 and on holidays also.
- You can make intra bank as well as interbank payments.
- Can be used on a mobile phone, internet banking and even ATMs.
- Knowing beneficiary’s Account number and IFSC is not compulsory in IMPS. You can transfer funds using MMID, Aadhaar number and mobile number only.
- You get the Debit & Credit Confirmation by SMS immediately.
Usage of IMPS
IMPS can be used to avail many services. One of the government’s most praised service *99# banking is also based on IMPS. You can use IMPS to transfer fund through these mediums.
- Mobile phones
- Smartphone- Bank App/ SMS / WAP/USSD (NUUP)
- Basic phone-SMS/USSD (NUUP)
- Internet- Bank’s Internet banking facility
- ATM-By Using ATM Card at Banks ATM
You can avail following services using the IMPS banking
- Funds transfer using mobile number and MMID
- Funds transfer using Aadhaar number
- Funds transfer using IFSC and Account number
- UPI – It is a mobile app based payment method which uses VPA of beneficiary.UPI works on IMPS structure.
- Merchant payments – You can pay to a merchant using his MMID.
- USSD banking (*99# Banking) – It gives you fund transfer facility through the feature phone
- QSAM – By dialling *99*99# you can know the Aadhaar and bank account link status.
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How Do I Enable IMPS
- If you want to send the money through IMPS using mobile then you have to register for the mobile banking. Some banks register you for mobile banking at the time of account opening while others need seprate application to activate the mobile banking.
- However you can use IMPS through the net banking, ATM and branch without the activation of mobile banking.
- If you are going to get money through the IMPS method, you don’t need to do anything. The money would be credited to your account and you will get SMS in your mobile. However, you can also get MMID from your bank to recieve money easily. MMID can be used instead of bank account number and IFSC or Aadhaar number.
Facilitating IMPS costs some money not only to banks but also to government. Hence the transactions using IMPS have some charges.
Rs 2.5 + service tax on transfers up to ₹ 10,000.
Rs 5 + service tax on transfers from ₹ 10,000 to ₹ 1,00,000.
Rs 15 + service tax on transfers from ₹ 1,00,000 to ₹ 2,00,000.
IMPS vs NEFT
In NEFT, funds are transferred from one account to another in batches. When you transfer money to an account it does not credit immediately. Rather it credits in the next settlement cycle which happens in every 60 minutes. Where all the payments made thru IMPS immediately credit to the beneficiary’s bank account.
Also, you can use NEFT only from 8.00 am to 7.00pm on weekdays and from 8.00 am to 1.00pm on first and third Saturdays. This service cannot be used on bank holidays. But in the case of IMPS, you do not need to worry about holidays or timings. You can use IMPS even at midnight or on bank holidays.
IMPS vs RTGS
Funds transfers using RTGS are also settled in real time. But RTGS is a payment mode for large sum of money. Funds which are less than ₹ 2,00,000 cannot be transferred using RTGS. Where in IMPS, there is no minimum amount limit.
RTGS can be used from 9.00am to 4.30pm on weekdays and from 9.00am to 2.00pm on Saturdays. Just like NEFT, RTGS also cannot be used during bank holidays. On the other hand IMPS can be used anytime.
IMPS vs UPI
Indian government’s newly launched service UPI is also a service to send and receive money. Just like IMPS, it also can be used round the clock and on holidays. The transactions done using UPI are also settled instantly. But there are some added features also in UPI. These features include virtual payment address and collect money using UPI.
UPI has a limit on transactions of maximum ₹ 1,00,000 per day. But the transaction limit for IMPS differs from bank to bank. Most of the banks have set it to ₹ 2,00,000. There is no minimum limit on both these services.