April 26, 2023

What is IMPS - Transaction Charges and How to Transfer Money Online

Immediate Payment Service (IMPS), which was introduced in 2010, marked the culmination of the collaborative efforts of the NPCI (National Payments Corporation of India) and the RBI (Reserve Bank of India) to simplify payment transfers.
IMPS is a popular method of instantly transferring money across bank accounts. So, we'll take a look at IMPS's meaning, various facets of IMPS usage, and its significance in this blog. Let's get started.

What is IMPS?

IMPS is a real-time electronic money transfer mechanism that immediately credits money to the payee or beneficiary account. Interbank transactions can be initiated via IMPS using various means, including mobile banking, internet banking, ATMs, SMS, etc. The daily IMPS limit for transactions is ₹5 lakhs.
This technology served as the foundation for the modern FinTech industry. For example, UPI is an IMPS variant that wouldn't have been possible without the invention of this technology first.

Features of IMPS

Thanks to the IMPS facility, users in India can now make payments more quickly. Here are a few of its main characteristics:
  • It facilitates secure interbank money transactions.
  • The participants for IMPS include a sender, receiver or beneficiary, banks, and NPCI.
  • IMPS transactions are compatible with both mobile and online banking systems.
  • You can use a beneficiary's Mobile Money Identifier (MMID) or contact number to transfer money to them over the IMPS platform.
  • IMPS supports the Reserve Bank of India's (RBI) initiative to digitise retail payments.
  • When carried out via smartphones, IMPS transactions do not always require the beneficiary's bank account information.
  • Both the sender and the receiver are notified after the money transfer has been completed successfully.

Necessary Information for IMPS Transactions

An IMPS payment must include at least one of the beneficiary's information listed below:
  • Aadhaar ID
  • Mobile numbers and the Mobile Money Identifier (MMID) for the sender and receiver
  • Bank account number and IFSC code (an 11-digit code present in the user's chequebook)

Charges in IMPS transactions

A set of charges accompanies each IMPS transaction. These IMPS charges are determined by the amount transferred and a service tax of 18%. The fees, however, are at the discretion of each bank.
The following fees are charged for IMPS transactions, excluding Goods and Service Tax (GST).
  • For transfers up to ₹10,000- ₹2.5.
  • For transfers between ₹10,000 and one lakh rupees- ₹5.
  • For transfers between ₹1 lakh and ₹2 lakh- ₹15.

How to transfer money via IMPS?

There are two ways to transfer money using IMPS:
  • P2A or Person to Account number: In this method, you can transfer funds to the beneficiary's bank account by entering the recipient's or beneficiary's account number and IFSC code.
  • P2P or Person to Person: You can send money by entering the recipient's or beneficiary's mobile number and MMID.
You can transfer money using the IMPS function on mobile and net banking systems and ATMs. The steps taken in each of the situations are listed below:

Steps for IMPS transactions using internet banking:

  • Access the online banking website of your bank.
    • Add a beneficiary by providing the recipient's name, IFSC code, account number, account type, and contact information.
    • Once your bank has approved the addition of a beneficiary, use the money transfer tab and choose the beneficiary you wish to send money to.
    • Verify the transaction, and you're done! The beneficiary's account will receive the money right away.

Steps for IMPS transactions via mobile banking

  • Open the mobile app of your bank.
  • Add a beneficiary if you still need to do so.
  • Input the beneficiary's contact number after selecting the money transfer or send money option.
  • Put in the beneficiary's MMID and the amount of money you want to transfer.
  • The funds will be transferred immediately after you input your mPIN to verify the transfer.

Steps for IMPS transactions via ATM

  • Visit the ATM of your bank.
  • Choose a language, then enter your pin.
  • Choose "Other Services" from the menu screen, then "Fund Transfer," then "IMPS Fund Transfer."
  • Enter the beneficiary's mobile number.
  • Next, enter the MMID and the transfer amount.
  • Verify the transaction and select the account from which to debit the funds.
  • Confirm the details and the transaction.

Things to Keep in Mind with IMPS transactions

  • Never divulge any OTP you receive.
  • Keep your debit card information private
  • Never divulge your net/mobile banking login information.

Benefits of IMPS

1. Real-time transactions are performed.

The IMPS has altered consumer perceptions of electronic payments and money transfers. A person can use the IMPS function to send money to family or friends immediately anytime they need to, so the benefit extends beyond simple purchases. Moreover, it doesn't take long for the beneficiary to get the money; the transactions occur within seconds.

2. The consumer has a variety of payment options.

Although many people are already used to paying using their smartphones, IMPS also works with payment methods that don't require an internet connection.
In addition to internet and mobile banking, customers can also make payments by plain old SMS. They can also use ATMs to do this. As a result, it can be said that consumers from all social strata can use this method of payment.

3. The transaction process is relatively straightforward.

An application's widespread acceptability is frequently attributed to how user-friendly it is. The IMPS is no different.
All you need to do is add a beneficiary to start making transactions to that beneficiary's account. The process of adding a beneficiary is quite simple- provide all necessary information like name, account number, IFSC codes or MMID, etc., and you are all set to transfer money.
Depending on your bank, you can send the necessary amounts to a beneficiary in less than 30 minutes. All subsequent payments are immediate once the initial transaction with a new beneficiary has taken place.

4. Transactions can be done anywhere, anytime.

One benefit of IMPS is that it is available around the clock every day of the year, including bank holidays. You might not be able to use NEFT or RTGS during bank holidays, but with IMPS, you can rapidly transfer money without any problems.

5. Integrated security measures

Consumers worry about mistakenly using unreliable sources that could result in the loss of their money. The NPCI's IMPS is a service you can rely on and feel safe to use.
Banks take steps such as requesting PINs and providing OTPs as identification verification to guarantee that no one can access your account to make unauthorised money transfers. Furthermore, you do not need to worry about the money "being lost" along the route if you input the beneficiary's data correctly.

Conclusion

In conclusion, IMPS services are quick and reliable. Along with altering consumer expectations and behaviour, IMPS enabled newer fast payment services to thrive in India. Customers can utilise this method without a smartphone, which increases its financial inclusiveness and makes it a fantastic payment alternative for the general public!

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