IMPS: Everything a business needs to know
IMPS (Immediate Payment Service) is a real-time interbank electronic funds transfer system in India. It enables individuals to instantly transfer funds from their bank accounts using mobile phones, internet banking, or ATMs. IMPS holds great significance in the world of digital payments and for merchants. It provides a fast and secure way for merchants to receive payments, enabling quick transactions and improving cash flow. With IMPS, merchants can expand their customer base by accepting digital payments and offering better convenience and accessibility to customers. IMPS also allows them to integrate their business with e-commerce platforms for seamless online transactions. It plays a vital role in the evolving digital payment landscape, offering a reliable and efficient payment solution for merchants.
The popularity of IMPS (Immediate Payment Service) has been growing rapidly due to its convenience, speed, and security. IMPS transactions reached INR 5.26 trillion in May '2023, showing an yearly growth of 16%.As more individuals and businesses embrace digital payments, IMPS has emerged as a popular choice for instant fund transfers, contributing to its increasing adoption and usage in India’s digital payment ecosystem.
What is IMPS transfer?
IMPS is an innovative payment system developed by India’s National Payments Corporation. IMPS allows users to use internet banking to send and receive money 24/7, including weekends and holidays, making it a convenient and efficient method of transferring funds. It facilitates secure transactions through multi-factor authentication and encryption, ensuring the safety and integrity of the transferred funds. IMPS has gained popularity in India’s digital payment landscape as a reliable and instant means of interbank money transfers.
The National Payments Corporation of India (NPCI) plays a crucial role in facilitating IMPS transactions. As the governing body for retail payments in India, NPCI oversees the development, implementation, and management of IMPS infrastructure. NPCI ensures interoperability among banks and payment systems, enabling seamless fund transfers across different financial institutions. It establishes the necessary guidelines, standards, and protocols for secure IMPS transactions. NPCI also operates the central payment switch for IMPS, which facilitates real-time clearing and settlement of funds. Through its robust and reliable infrastructure, NPCI enables the widespread adoption and smooth functioning of IMPS, contributing to the growth and success of the service in India’s digital payment landscape.
How does IMPS work?
IMPS means instant and secure money transfers between bank accounts. Here is a detailed explanation of how IMPS works:
1. Registration: To use IMPS, customers need to register for the service with their respective banks. During the registration process, customers provide their bank account details and link their mobile number to their account.
2. Initiation: Once registered, customers can initiate an IMPS transaction through various channels, including mobile banking apps, internet banking portals, or ATMs. They need to provide the following details:
a) Sender’s mobile number
b) Receiver’s mobile number or MMID (Mobile Money Identifier)
c) Receiver’s bank account number and Indian Financial System Code (IFSC)Authentication: To ensure the security of the transaction, the sender receives a One-Time Password (OTP) on their registered mobile number. The OTP is used to authenticate the transaction and validate the sender’s identity.
3. Transaction Processing: After successful authentication, the sender’s bank sends a request to the National Payment Corporation of India (NPCI), which acts as the central switch for IMPS transactions. The NPCI verifies the transaction details and forwards it to the receiver’s bank.
4. Funds Transfer: The receiver’s bank receives the transaction request from the NPCI and credits the funds to the receiver’s bank account in real-time. The sender’s bank debits the funds from the sender’s account simultaneously.
5. Confirmation: Once the transaction is completed, both the sender and receiver receive confirmation messages on their respective mobile numbers or through the banking channels used for initiating the transaction. The messages include details such as transaction status, amount transferred, and transaction reference number.
It’s important to note that IMPS operates 24/7, including weekends and holidays, enabling instant fund transfers at any time.
Overall, IMPS leverages secure authentication, real-time processing, and interbank coordination to facilitate quick and convenient money transfers between bank accounts, providing individuals with a reliable digital payment solution.
Who can use IMPS?
IMPS is available for use by various individuals and entities in India. Here are the categories of users who can utilize IMPS:
- Individuals: Any individual who holds a bank account in India and has registered for IMPS with their bank can use the service. This includes account holders in public sector banks, private sector banks, cooperative banks, and regional rural banks.
- Merchants and Businesses: Merchants and businesses can also use IMPS to receive payments from customers. By providing their registered mobile number or MMID (Mobile Money Identifier), merchants can accept instant payments from customers who wish to transfer funds digitally.
- Government Agencies: Government agencies, departments, and organizations can utilize IMPS for various purposes, such as disbursing welfare benefits, salary payments, and pension transfers.
- Financial Institutions: Banks, non-banking financial institutions, and payment service providers can integrate IMPS into their systems to offer instant fund transfer services to their customers.
It’s important to note that to use IMPS, individuals and businesses need to register for the service with their respective banks and link their mobile number to their bank account.
IMPS is designed to cater to a wide range of users, including individuals, merchants, government agencies, and financial institutions, providing them with a convenient and secure platform for instant money transfers in India.
What are the Benefits of IMPS?
IMPS offers several benefits that make it a preferred choice for digital payments in India. Let’s explore these benefits in detail:
- Instant Fund Transfers: IMPS enables immediate transfer of funds in real-time, ensuring quick and efficient transactions. Whether you need to send money to friends or family, pay bills, or make purchases, IMPS ensures that the funds reach the recipient instantly.
- 24/7 Availability: IMPS operates 24 hours a day, 7 days a week, including weekends and holidays. This round-the-clock availability allows users to initiate transactions at any time, providing flexibility and convenience.
- Multiple Access Channels: IMPS can be accessed through various channels, including mobile banking apps, internet banking portals, ATMs, and USSD codes. This wide range of access channels caters to different user preferences and ensures that anyone with a bank account can conveniently use IMPS.
- Secure Transactions: IMPS incorporates robust security measures to protect users’ financial information and ensure the safety of transactions. It uses two-factor authentication, encryption, and secure network protocols to safeguard sensitive data, providing users with peace of mind during fund transfers.
- Interbank Transfers: IMPS facilitates transfers between different banks, allowing users to send funds to any bank account across India. This interoperability eliminates the need for users to have accounts in the same bank as the recipient, making it convenient for interbank transactions.
- Utility Bill Payments: IMPS provides the facility to pay utility bills such as electricity, gas, water, and telecom bills. Users can conveniently make these payments through their bank accounts, consolidating their bill payment process into a single platform.
How to use IMPS?
Using IMPS involves a few steps to initiate and complete a transaction. Here is a detailed explanation of how to use IMPS:
1. Registration: To use IMPS, you need to register for the service with your bank. Visit your bank’s branch or access their internet banking portal to register. Provide the necessary details, including your bank account number, mobile number, and other required information.
2. Mobile Banking App or Internet Banking: Once registered, you can access IMPS through your bank’s mobile banking app or internet banking portal. Download the app from your app store or visit your bank’s website to access the internet banking portal.
3. Login and Select IMPS: Open the mobile banking app or access the internet banking portal and log in using your credentials. Locate the IMPS option within the app or portal. The exact location may vary depending on the bank’s interface.
4. Select Transaction Type: Within IMPS, you can choose from various transaction types based on your requirement. Common options include fund transfer, mobile recharge, or utility bill payment. Select the appropriate transaction type to proceed.
5. Provide Transaction Details: Depending on the selected transaction type, you’ll need to provide specific details. For a fund transfer, you’ll typically need the recipient’s mobile number or MMID (Mobile Money Identifier), along with their bank account number and IFSC code. For mobile recharge or bill payment, provide the required details such as mobile number or biller information.
6. Authenticate the Transaction: To ensure the security of the transaction, you’ll need to authenticate it. This typically involves receiving an OTP (One-Time Password) on your registered mobile number. Enter the OTP within the specified time frame to validate the transaction.
7. Confirm and Complete: Once the transaction details are validated and authenticated, review the information and confirm the transaction. Verify the transaction amount, recipient details, and any other relevant information. Once confirmed, the transaction will be processed.
8. Transaction Status and Confirmation: After completing the transaction, you’ll receive a confirmation message or notification indicating the status of the transaction. It will include details such as the transaction reference number, amount transferred, and the recipient’s confirmation (if applicable).
The exact steps and user interface may vary slightly depending on your bank’s mobile banking app or internet banking portal. Refer to your bank’s instructions or customer support for any specific guidance.
Using IMPS provides a seamless and convenient way to transfer funds, recharge mobiles, and make utility bill payments using your bank account, all in real-time.
IMPS Use cases
IMPS has a wide range of use cases and applications that cater to various financial needs. Let’s explore how IMPS can be used in the following scenarios:
- Person-to-Person (P2P) Payments: IMPS allows individuals to transfer funds directly to another person’s bank account in real-time. Whether you need to split bills with friends, send money to family members, or make payments to service providers, IMPS enables quick and convenient P2P transactions.
- Bill Payments and Recharges: IMPS can be used to pay utility bills such as electricity, gas, water, and telecom bills. Instead of visiting physical payment centers or using different payment platforms, you can make bill payments directly through IMPS, ensuring timely payments and avoiding late fees.
- Online Shopping and E-commerce: IMPS is increasingly being accepted as a payment method for online shopping and e-commerce transactions. When making purchases on e-commerce platforms or merchant websites, you can choose IMPS as the payment option and securely transfer funds from your bank account, providing a seamless shopping experience.
- Mobile Recharges: With IMPS, you can recharge your mobile prepaid plans directly from your bank account. Instead of purchasing physical recharge vouchers or using separate platforms, IMPS enables quick and hassle-free mobile recharge services, allowing you to stay connected without the need for cash or physical cards.
- Donation and Charity: IMPS can be used for making donations and contributions to charitable organizations or social causes. By using IMPS, you can support various initiatives and make a positive impact by securely transferring funds directly to the designated accounts.
- Merchant Payments: IMPS facilitates payments to merchants and businesses for goods and services rendered. By providing their registered mobile number or MMID, merchants can accept instant payments from customers who wish to make purchases using IMPS, enabling secure and efficient transactions.
- Emergency Fund Transfers: IMPS is particularly useful during emergencies when immediate fund transfers are required. Whether it’s providing financial support to a loved one, covering medical expenses, or handling unexpected situations, IMPS allows for quick and reliable money transfers, ensuring timely assistance.
These are just a few examples of how IMPS can be used in various scenarios. As a versatile payment service, IMPS enables person-to-person payments, bill payments and recharges, online shopping, mobile recharges, donations, merchant payments, and emergency fund transfers, making it a convenient and efficient solution for a wide range of financial transactions.
In conclusion, IMPS has emerged as a transformative solution in the world of digital payments. Its real-time fund transfer capabilities, 24/7 availability, and secure transaction environment have made it immensely popular among individuals and merchants alike. IMPS offers a seamless and convenient way to transfer funds, make bill payments, recharge mobiles, and engage in online shopping. Its versatility and wide range of applications have contributed to its growing adoption in India. With IMPS, users can enjoy instant transactions, quick confirmations, and the flexibility to conduct financial transactions anytime, anywhere. As digital payments continue to evolve, IMPS stands as a reliable and efficient platform for a variety of payment needs.
1) Is IMPS better than NEFT?
IMPS and NEFT serve different purposes in the Indian digital payment landscape. IMPS offers real-time fund transfers with 24/7 availability, while NEFT provides scheduled batch-wise settlements. The choice between them depends on the urgency, transaction amount, and convenience required for a specific payment.
2) Is IMPS transfer free?
The charges for IMPS transactions vary depending on the bank and the transaction amount. While some banks may offer IMPS transfers for free, others may levy nominal charges. It is advisable to check with your bank or refer to their fee schedule to understand the applicable charges for IMPS transfers.
3) How much time does IMPS take?
IMPS transactions are typically processed instantly, allowing for immediate fund transfers. In most cases, the recipient receives the funds within a matter of seconds. However, in some instances, it may take up to a few minutes for the transaction to be completed.