Immediate Payment Service (IMPS): Full Form, Features, Procedure and Charges

What is IMPS?

IMPS is a payment service or a method for instant money transfer. It has been developed by the National Payments Corporation of India (NPCI). IMPS is a real-time and secure money transfer system through which we can transfer money 24×7, even on public holidays. IMPS facility can be availed through various methods such as mobile, internet, ATM, and SMS. It has made it very convenient to send and receive money from anywhere and anytime.

IMPS stands for Immediate Payment Service. It is controlled by NPCI. The National Financial Switch Framework is the base for the development of IMPS. IMPS, as developed today, went through many stages and has a significant history of development. Various milestones in IMPS development are as follows:

• August 2010: NPCI conducted a pilot study on the topic of mobile payment systems in collaboration with various banks such as SBI, ICICI, BOI, etc.
• September 2010: This project was joined by Yes Bank.
• October 2010: This project was joined by Axis Bank.
• November 2010: This project was joined by HDFC Bank.
• 22 November 2010: IMPS was publicly launched on this date by Shyamala Gopinath, DG at RBI, Mumbai.
• Initially, it was launched only by 4 banks, which are Union Bank of India, State Bank of India, Bank of India and ICICI Bank, but now this facility has been implemented by more than 150 banks across the country.

Features of IMPS

IMPS has the following features:

1. Availability: IMPS is available 24 x 7, and funds can be sent anytime and anywhere through IMPS instantly.

2. Acknowledgement: The receiver and sender of the funds receive a confirmation of credit and debit, respectively, as per the choice of notification mode. Thus, a person does not have to worry, if the funds are transferred or not.

3. Versatile: IMPS service is not only used for funds transfer between two parties but can be used for various other purposes also, such as bill payments, online shopping, fee payment, insurance premium payments, etc.

4. Easy to Use: IMPS is very easy and convenient to use and requires only an internet connection on mobile or computer to be used. It can also be through ATM and SMS in the absence of an internet connection. Thus, it provides a great range of options to use it, making it convenient and easy for the user.

5. Safe and Secure: IMPS is protected through mechanisms such as encryption and firewalls, and the transaction by the user is safe from all attacks. So a user can transact hassle-free using IMPS.

What is the Procedure of IMPS?

In order to use IMPS, a user needs to register for the mobile banking or internet banking service provided by the bank. The bank then provides the user with Mobile Money Identifier (MMID) and mobile banking personal identification number (MPIN). An IMPS transaction also requires the sender to have the bank account number and the receiving bank’s IFSC code. With all this information, a user can use IMPS service through various modes as follows:

Using Internet Banking

• Log in to the Internet banking portal of your bank.
• Add a beneficiary for funds transfer by entering the beneficiary details such as name, bank account number, bank name and IFSC code.
• Verify the beneficiary details entered by you. Wait for the beneficiary confirmation and activation by the bank.
• The activation time may vary depending on your bank.
• Once the beneficiary is activated, you can send money using the funds transfer option.
• Select the beneficiary to whom you want to send the money.
• Enter the amount to be transferred and verify it using your internet banking credentials or OTP.
• You will receive a confirmation when the transfer is complete and also be given a transaction ID for future reference.

Using Mobile Banking

• Install the mobile banking application of your bank from a trusted source such as the App Store or Google Play store.
• Launch the application and log in using your credentials.
• Add a beneficiary for funds transfer by entering the beneficiary details such as name, bank account number, bank name and IFSC code. You can also add a beneficiary using MMID in this case.
• Verify the beneficiary details entered by you. Wait for the beneficiary confirmation and activation by the bank.
• The activation time may vary depending on your bank.
• Once the beneficiary is activated, you can send money using the funds transfer option.
• Select the beneficiary to whom you want to send the money.
• Enter the amount to be transferred and complete the transaction.

Using ATM

• Visit the ATM of the bank where you hold a bank account.
• Select your desired language and proceed.
• Choose Other Services and then select Funds Transfer. Then, choose IMPS Fund Transfer.
• Enter the beneficiary details, such as the mobile number and MMID.
• Enter the desired amount and verify the transaction.
• You will receive a confirmation when the transfer is complete and also be given a transaction ID for future reference.

How does IMPS work?

Any IMPS transaction requires to follow a certain procedure for the processing of the transaction. The procedure followed for the settlement of an IMPS transaction are:

• The banks that are involved in the IMPS transaction must be registered with the National Financial Switch (NFS). The registration with the NFS ensures safe and secure transactions.
• When the transaction is initiated by the sender, the sender’s bank debits the sender’s bank account with the amount being sent.
• The sender’s bank then sends a secure message to the receiver’s bank, i.e. the bank to which the funds are being sent.
• The receiving bank then credits the receiver’s account with the amount sent by the sender.
• Net settlements between the sending and receiving bank are done in 3 cycles per working day.
• The settlement between the banks involves the mechanism of RTGS for every cycle.

What are the Charges for IMPS?

Each IMPS transaction involves a small amount of charges depending upon the amount being transferred. Various amounts of charges on the amount being transferred are shown below:

Amount Being Transferred (in ₹)	Charges Applicable (in ₹)
Upto 10,000	2.5
10,000 – 1 Lakh	5
1 Lakh – 2 Lacs	15

The charges may also vary from bank to bank and are generally mentioned on the payment page of the bank. In case, the charges are not mentioned on the payment page, it is advised to check the charges on the bank’s website before making transfer. The transfer also involves an additional 18% GST on the charges applicable.

What are the IMPS Timings?

IMPS is not restricted by the timings. It can be done anytime and anywhere, 24 x 7 round the clock, even on bank and public holidays. Thus, IMPS provides an easy way to transfer funds even if the bank is closed. However, IMPS may be affected by the server issues of the bank or maintenance activities and usually, an appropriate message is shown to the user in such cases on the funds transfer page.

What is the Limit of IMPS?

IMPS transactions involve a limit of ₹5 lakhs per user per account per day and are subject to the availability of funds in the user’s account. This limit has been imposed in view of the security of the users and to prevent any fraudulent transactions in the user’s account. It also ensures that the servers are not flooded with requests and every user is able to do the transaction effortlessly and easily with minimal failure and errors.

Frequently Asked Questions

Q1. When was IMPS publicly launched?

IMPS was publicly launched in 2010.

Q2. Who maintains IMPS?

IMPS Is maintained by National Payments Corporation of India (NPCI).

Q3. What is the daily limit of IMPS?

IMPS has a daily limit of Rs. 5 lakhs per person per account per day.

Q4. What are the times when IMPS is available?

IMPS is available 24 x 7 and is not bound by the timings.

Q5. What are the requirements to do an IMPS transfer?

An IMPS transfer requires a sender to have mobile banking or internet banking credentials or access to bank ATM. It also requires the bank account number and IFSC code or MMID of the receiver.

Q6. Which banks implemented IMPS first?

Initially IMPS was implemented only by 4 banks, which are Union Bank of India, State Bank of India, Bank of India and ICICI Bank.

Q7. What are the IMPS charges applicable on a transfer of 1 lakh?

IMPS involves a charge of Rs. 15 from 1 lakh to 2 lacs.

Q8. Are IMPS charges fixed for all banks?

No, IMPS charges are not fixed for all banks and vary from bank to bank. Some banks also charge a service fee over and above the charges on IMPS.