April 26, 2023

What is IMPS - Full Form, Features, Limit, Charges, & Meaning

Launched in 2010, IMPS, Immediate Payment System was developed as yet another nuanced alternative to transfer funds interbank via payment gateways such as RTGS and NEFT, electronically, in real time, everytime and everywhere using multiple access channels such as mobile banking, netbanking, ATM, SMS and IVR.
Backed by the NCPI ( National Payments Corporation of India, and under the overall purview of the RBI, IMPS payment gateway can be availed by those banks and PPIs (prepaid payment instrument issuers) which have a valid licence from the RBI.
Currently 652 members live on the IMPS payment gateway which includes banks & PPIs. This channel is versatile, simple and quick as in addition to fund transfers, it can also be used to pay insurance premiums, utility bills, ticket charges, fees, online purchases etc**.Hope by now, you have understood the basic concept. So basically, the core objectives of introducing an alternative payment gateway was to:**
Incentivise customers to use the mobile banking channel to transmit funds.
Infact, the mobile banking channel further democratised the pace of digital adoption of banking services due to wider reach of smartphones.
sides, this payment gateway is relatively simpler, as you only require the mobile number of the beneficiary and the bank generates a unique 7 digit MMID code.
Given the ease, speed, 24*7 availability, instant notification and safety of the transaction, it is no wonder that this channel has gained significant momentum especially over the last two years ( 2020-2022) with the number of monthly IMPS transactions rising from 248 million to 420 million.

Let us delve a bit deeper to understand the nuances of this payment gateway- the registration process, transaction fee, transaction timings, transaction amount limits etc.

Transaction fee

All such transactions are chargeable and the fee differs from bank to bank. Typically, it ranges from ₹2.5 to ₹25+GST.
On the other hand, payments via RTGS or NEFT attract a fee when initiated from a bank branch.

Registration process

  • To begin with the sender or remitter has to register his account for mobile banking services at his bank branch.
  • Consequently, the sender will receive a mobile money identifier (MMID) and MPIN from the bank which is a unique 7 digit code.
  • Now download the application software for mobile banking on your smartphone.
  • As nextstep steps, you need to register the beneficiary or the receiver.
  • Link your mobile digits to the account in the respective bank.
  • You will receive a mobile money identifier (MMID) from the bank.
  • Now to transfer funds to beneficiary's account:
  • Login to the mobile banking app and navigate to the menu ; else use the SMS facility, provided your bank provides the SMS services.
  • Now get beneficiary mobile digits and MMID- 7 digit unique code.
  • Key in beneficiary's mobile number, beneficiary MMID, amount and your MPIN and press ' send'
  • On successful completion, that is when the amount is debited from the sender's account and credited to the beneficiary's account, you will receive a confirmation SMS.
  • It is advisable to take note of the transaction reference code for any issues that may arise.
It is important to note that while earlier, both the remitter and the beneficiary were required to link their mobile numbers with their respective bank accounts and get MMID, in order to send or receive funds using IMPS, the platform was modified to include parameters such as account number and IFSC code or by using bank account linked Aadhaar, thereby further simplifying and democratising the payment channel.
It is also noteworthy, the credit risk related to insufficient fund balance is negated as such transactions are only fulfilled when the primary agency, NPCI routes the fund transfer to the beneficiary's account only after the remitting bank has debited the sender's customer account.

Transaction amount

All IMPS transactions have a maximum threshold limit capped at ₹5 lakhs per day.
However, there is no daily minimum transaction amount.

Transaction timings

All IMPS transactions are available 247365. When compared to other payment gateway such as NEFT ( which is also available 24*7), the transaction process is faster, on a real time basis ; while NEFT is subject to a lag of about 2 hours.

Frequently Asked Questions (FAQs):

Q. Who are the key participants for IMPS?

For fulfilling an IMPS based fund transfer, the following participants are involved:
  • Remitter (Sender)
  • Beneficiary (Receiver)
  • Banks
  • National Financial Switch - NPCI

Q. What details are required for IMPS fund transfer?

  • IMPS account digits and IFS Code or mobile number and MMID of both the sender and receiver.
    • In case of an ATM to channel, you need to validate through your ATM PIN.

Q. What are the key precautions to take as a customer to ensure safe and secured fund transfer through IMPS?

It is always good to follow these practices mentioned below to ensure safe fund transfers.
  • Never share your debit card details such as card number, expiry date & CVV with anyone.
  • Never share your one-time password ( OTP) with anyone.
  • Never forward SMS to unfamiliar digits.
  • Never share your net/mobile banking login password.

Q. Can IMPS service be availed offline?.

No, this service is only available online. However, other payment gateways such as NEFT or RTGS can be availed offline as well.

Q. What are the prerequisites for IMPS fund transfer?

You need to keep in mind the following while making use of this payment gateway.
  • For starters, you need to have a mobile banking account which then has to be linked to an app through your mobile phone.
  • Secondly, be extra cautious with regards to typing the beneficiary details such as the account number, amount etx. In case you make an error, the fund would be transferred to someone else's account . In such a case, you cannot retrieve or reverse the transaction until the beneficiary agrees to do so.
  • Thirdly, you must ensure steady and uninterrupted net connection so that any potential lags and probability of submitting fund transfer requests more than once is minimised.

Q. What is the IMPS reference number?

The reference code is a twelve digit number provided by the bank and displayed on your screen as soon as you authenticate the payment via this channel. This reference code can also be located in your bank account statement against the transaction ID.

Q. Which primary agency manages the IMPS payment gateway?

This type of fund transfer is routed through the National Payments Corporation of India (NPCI) whereas RTGS and NEFT are operated by the Reserve Bank of India.
It is important to note that all three fund transfer channels ( IMPS, RTGS, NEFT) are safe and secure and come under the purview of the Reserve Bank of India.

Never miss a trading opportunity with Margin Trading Facility

Enjoy 2X leverage on over 900+ stocks

Upstox Margin Trading Facility
Apple Logo
Downloadlogo
iOS App
Google Play Logo
Downloadlogo
Android App

RELATED ARTICLES

Factors to consider while selecting a financial advisor

A financial advisor assists with investment decisions, account management, and financial planning, reducing stress over fund growth. Various types include those specialising in planning, investing, retirement, or robo-advisors with automated services. To select the right advisor, understand needs, determine budget, research credentials, choose the right advisor type, and ensure clear communication. Advisors align financial strategy, build trust, and aid in retirement planning amid market fluctuations. Choosing wisely is crucial for success; thorough research and compatibility lead to peace of mind and improved money management. Are you planning to make your money grow, but are not sure how to invest it strategically? Hiring a financial advisor could be a good start in that endeavour. From helping you build a solid portfolio to ensuring that your financial goals are successfully achieved, a financial advisor can help you in more ways than one. A disciplined process will enable you to get your personal finances in order and accomplish both short- and long-term objectives. As per Statista, 35% of Americans availed the services of financial advisors in 2022 to guide them with their investments. In this article, we will share with you some tips on identifying the right financial advisor. So, let’s start with the basics.

IDBI Bank Mobile Banking & How to Activate: Login, Registration, & App

With an intent to provide convenient and hassle-free banking services, IDBI Bank has launched its mobile banking app GO Mobile+. With IDBI mobile banking you can opt for a hassle-free and seamless fund transfer, account enquiry, bill payments, and much more. Moreover, this app is safe and developed with easy features. Check out the following sections till the end to know the features, benefits, and services of this app in detail!

How to calculate in-hand salary from CTC

The difference between CTC and in-hand salary is what causes much distress to both new and old employees. This blog breaks down the terms, heads, and categories, making it easier to compute in-hand salary from CTC. Have you ever experienced the sudden shock when the amount of salary credited in your account is lower than what you thought was in the offer letter? That is exactly what happens to employees, especially first-timers, when dealing with the complexities of jargon such as statutory, gross, net, bonus, deductions, and taxable components. If these are terms that have troubled you in the past or continue to do so, the following article will help you simplify the CTC in your offer letter and accurately calculate your in-hand salary. Read on!

5 Smart Financial Tips for Young Adults

Summary: Your 20s and 30s are a crucial time to start building a strong financial future. By making smart money decisions now, you can set yourself up for success later in life. In this blog post, we'll share five essential financial tips for young adults, including budgeting, saving, investing, and retirement. Money management secures your future, whether that's covering an unexpected bill or saving for a significant purchase. It involves budgeting, saving, and investing – essential skills for a stable financial future that are frequently overlooked in education. This blog will guide you through five practical financial tips that are simple to understand and apply. So, let's get started. Top 5 personal financetips for young adults Handling your money well is key—it's what keeps you secure when life throws surprises and helps you grow your savings for the future. It's about saving where you can, investing with a plan, and not spending more than what comes in. Nailing these basics can turn things around for you. So here they are, the top five financial tips for young adults: - Create a budget and track your expenses Budgeting is about tracking your income and expenses to make sure you spend less than you earn. It's creating a plan for your money, so you're in control of where it goes. Let's say you bring home INR 30,000 a month. You might allocate INR 10,000 for rent, INR 7,000 for food, and INR 3,000 for travel. Out of what’s left, you could put INR 5,000 into savings for emergencies or future goals, and the remaining INR 5,000 could cover your mobile plan, internet, or a weekend outing. This way, you've got your expenses covered, your savings on the rise, and still keep some money aside for leisure and unexpected needs. It's about making intentional choices so that you can balance today's needs with tomorrow's plans. - Start saving today Saving helps you build an [emergency fund](https://upstox.com/market-talk/emergency-fund-101-how-to-start-and-why-its-crucial-for-your-finances/), a cushion of money for unexpected expenses or emergencies. It also enables you to reach your short-term and long-term goals, like buying a car, going on holiday, or starting a business. A good rule of thumb is the 50/30/20 strategy. After you've covered your necessary expenses, 50% of your income, allocate 20% directly to your savings. For a monthly income of INR 30,000, that's INR 6,000 going into your savings each month. You can channel these funds into [mutual funds](https://upstox.com/learning-center/mutual-funds/the-basics-of-mutual-funds/), which often yield higher returns over time compared to a regular savings account. The remaining 30% of your income can then be used for discretionary expenses. By sticking to this rule, you automatically prioritise your financial future every month, steadily building a fund that can support big life events or tide you over during tough times. - Invest your money wisely Investing allows your money to actively work for you by acquiring assets that may generate income or appreciate over time. It's a handy way to grow your funds, beat inflation, and hit major milestones like buying a house, funding your studies, or setting up a cosy retirement. Take mutual funds, for instance. You can start small with SIPs from INR 500 and gradually build a mixed bag of investments. If you're not big on taking risks, a balanced mutual fund could be your thing, offering a steady blend of stocks and bonds. Make sure your investment picks match how much risk you're okay with, how long you plan to invest, and what you're hoping to achieve financially. - Plan your retirement ahead Retirement may feel like a dot on the horizon, but the earlier you begin, the better off you'll be. Consistently contributing a manageable amount, say INR 2,000, to a retirement plan like the [NPS](https://upstox.com/saving-schemes/nps-national-pension-scheme-india/), each month can amass a substantial sum over the years. This is where compounding comes into play – the interest you earn starts earning interest of its own, and over time, this growth accelerates. So, by starting in your 20s, you give your savings the longest possible time to expand, ensuring you a more comfortable and financially secure retirement. - Understand taxes Familiarising yourself with tax-saving opportunities, like investing in the [public provident fund (PPF)](https://upstox.com/saving-schemes/public-provident-fund-ppf-interest-rate/) and [equity-linked savings schemes](https://upstox.com/learning-center/mutual-funds/what-is-elss-and-how-to-invest-in-elss/) (ELSS) under Section 80C, can make a big difference to your finances. For those in a higher tax bracket, directing up to INR 1.5 lakh into a PPF can significantly cut your taxable income. This astute handling of taxes ensures you're not just meeting legalities but also retaining more income for your aspirations. Your best investment is in your financial education. Stay informed about financial products and market trends. This doesn't mean you need to become an expert overnight but understanding the basics of investments, insurance, and savings will help you make smarter decisions. Wrapping up: Key points to remember - Begin with small investments and increase over time, balancing risk with a mix of assets for long-term growth. - Small, regular contributions to a retirement fund can grow significantly, thanks to compounding interest. - Investing in options like PPF and ELSS can reduce taxable income and maximise savings. Note: To help plan your trading activities and investment strategies, find here the [NSE Holidays 2023](https://upstox.com/stocks-market/nse-holidays-2023/), [BSE Holidays 2023](https://upstox.com/stocks-market/bse-holidays-2023/), [MCX Holidays 2023](https://upstox.com/stocks-market/mcx-holidays-2023/), and [Muhurat Trading 2023](https://upstox.com/stocks-market/muhurat-trading-2023/). Also see here to know more about the [stock market timings](https://upstox.com/stocks-market/nse-bse-share-market-timing-in-india/).