In the last decade, the banking sector in India has evolved by leaps and bounds. Gone are the days when sending and receiving money involved long, cumbersome processes, not to mention the long wait to receive credits. Today, you can transfer funds in seconds, and your beneficiaries can receive them instantly too. Thus, if you need to send money to your loved ones during emergencies or pay for your utilities, groceries, and more, you can simply initiate a quick online fund transfer. One such revolutionary mode of online payments is IMPS. Let us find out what is IMPS transfer and the many ways in which you can initiate it.
- Short for Immediate Payment Service, IMPS is an instant inter-bank electronic fund transfer service.
- You can send money in real-time using IMPS.
- IMPS is available 24×7 throughout the year, including on Sundays and bank holidays.
- You can access IMPS through multiple channels – mobile banking, SMS, Net banking or even ATM.
- You can send money using either a mobile number and MMID or account number and IFSC code.
History of IMPS:
It is built on the current NFS (National Financial Switch) and is managed by NPCI (National Payments Corporation of India). IMPS started in 2012 with a pilot from NPCI for mobile payment systems with 4 banks, viz. State Bank of India, Bank of India, Union Bank of India, and ICICI Bank. NPCI then expanded IMPS and included YES Bank, HDFC Bank, and Axis Bank later that year. On 22nd November, IMPS was launched publically and now includes 53 commercial banks, 101 districts / rural/urban, and cooperative banks.
IMPS is more popular on mobile phones but it can also be used through desktops, laptops, and tablets. The service works in liaison with VPA (Virtual Payment Address), i.e. a unique virtual payment address that transfers money directly from your linked bank account. On mobile phones, you only have to generate a unique 7-digit MMID (Mobile Money Identifier). After that, you can avail the service as per the mobile application of your bank. The maximum transaction limit of IMPS for regular use goes from Rs. 10,000 to Rs. 5 lakh according to different banks. In addition, there is no minimum limit for transactions in IMPS.
Users can choose to transfer the funds using the 10-digit mobile number of the receiver or bank details such as account number and IFS Code. However, transferring money through a mobile number is easier as the chances of mistakes are low. This is because entering complicated bank details can lead to mistakes. Using a mobile number for transactions is a better idea as both parties do not have to share their confidential bank details with each other.
- Instant Fund Transfer: As the IMPS full form suggests, fund transfer through IMPS is simple and instant. The service uses mobile phones as a channel for accessing bank accounts and performs inter-bank fund transfers in a secure way.
- Availability: IMPS is available 24/7 and 365 days enabling users to transfer funds anytime and from anywhere. You do not have to go to the bank and follow an elaborate process for making payments to your clients or transferring funds. The service functions seamlessly throughout the year even on public holidays and bank holidays.
- Confirmations: Both the sender and receiver get instant credit and debit notifications as soon as the funds are transferred. This means that you do not have to worry whether the funds are transferred or not. The service takes care of its processes very well.
- Versatility: Versatility is the main feature of IMPS as it can be used in various modes as well. Users can use IMPS for P2P (person to person) funds transfer using the mobile number or by using the bank account details. IMPS can be used for P2M (Person to Merchant) payments as well.
- Usability: IMPS is not limited to funds transfer only. It can be used for various other purposes as well. The service can be used for insurance premium payments, online shopping, OTC payments, utility bill payments, travel and ticketing, and for paying fees to schools, colleges, and universities.
The Indian banking system has evolved over the years and fast electronic fund transfer systems such as NEFT, RTGS, and IMPS are good examples of modernisation. Each one of these has its own perks but IMPS can be easily conceived as the fastest mode of fund transfer. Some of the benefits of using IMPS as a primary fund transfer medium are explained here.
- Minimum Details Required: Fund Transfer through IMPS does not require any confidential details from both the sender and the receiver. The basic requirements for sending money through IMPS include name, mobile number, and MMID of the beneficiary. However, funds can be transferred through IMPS using account number and IFSC Code as well but such details are complicated and even a slight mistake in entering data can lead to significant financial loss.
- Inexpensive: IMPS is an inexpensive mode of fund transfer. The charges for IMPS are as follows:
|Transfer Amount||Charges(Subject to Change According to Banks)|
|Up to Rs. 10,000||Rs. 2.50 + Applicable GST|
|From Rs. 10,000 to Rs. 1 lakh||Rs. 5 + Applicable GST|
|From Rs. 1 lakh to Rs. 2 lakh||Rs. 15 + Applicable GST|
|Rs. 2 lakh and Above||Rs. 25 + Applicable GST or No Charge|
What Details are Required for IMPS?
If you wish to use IMPS mobile banking to send money, you will need to use the MMID (Mobile Money Identifier) and an MPIN to get registered. MMID is a unique seven-digit code linked to your mobile number that is generated once. You would also need to enter the IMPS beneficiary details that include the beneficiary’s mobile number and MMID.
For fund transfer, you can also use a combination of the IMPS account number and IFS Code or mobile number and MMID. Both yours and the beneficiary’s details will be required for the purpose. If you are using an ATM to avail IMPS, you would need to authenticate using your ATM PIN.
What is the IMPS Reference Number?
Once you complete an IMPS transaction by authenticating the payment, the bank provides you with a 12-digit number that is displayed on the screen. This is known as the IMPS reference number. You can find the number on your bank account statement too against the IMPS transaction ID.
Apart from IMPS. You can also use RTGS or NEFT to transfer money from one account to another. Know about the difference between IMPS vs NEFT vs RTGS and select the mode that suits you best!
NEFT (National Electronic Funds Transfer)
With NEFT, you can transfer any amount to the recipient’s account in a one-on-one transfer basis. NEFT transactions don’t have a maximum limit for funds that can be transferred in a single day.
– NEFT transfer timings
The NEFT system is available round the clock throughout the year on all days (24x7x365). Funds are transferred in batches that are settled in 48 half-hourly time slots throughout the day.
– NEFT transfer limits
There is no maximum or minimum limit on the amount of funds that could be transferred through NEFT. With NEFT, you can initiate transactions to transfer funds from one bank account to another throughout India. However, you must make sure that the banks are a part of the NEFT transfer network (another way to say this is that the banks should be NEFT-enabled).
– How to do NEFT transfer
To transfer funds via NEFT, all you have to do is log in to your net banking portal and add the recipient as a beneficiary. You’ll need to enter details like their name, account number, account type and IFSC code under the Add New Payee section. Once you choose NEFT as the preferred mode of transfer and enter the amount to be transferred, the fund transfer will be completed.
RTGS (Real Time Gross Settlement)
Business owners can use RTGS when they need to transfer large amounts instantly. One advantage that RTGS has over the other methods is the transaction speed, since the entire amount is transferred in real time.
– RTGS transfer timings
RTGS is available for customer and inter-bank transactions round the clock — except for the interval between ‘end-of-day’ and ‘start-of-day’ processes (these timings will be duly broadcasted through the RTGS system).
– RTGS transfer limits
There’s a minimum limit of Rs. 2 lakhs for RTGS transactions, and there’s no maximum limit as such.
To get an RTGS-enabled account, you can either contact your bank or check your eligibility status in your online banking portal. If you’re using RTGS for a fund transfer, make sure that both you and the recipient have RTGS enabled accounts.
– How to do RTGS transfer
To transfer funds via RTGS, log in to your banking portal and add the recipient as a beneficiary by entering details like their name, account number, account type, and IFSC code. Then choose RTGS as the mode of transfer and enter the amount to be transferred, and the fund transfer will be completed.
IMPS (Immediate Payment Service)
IMPS is another real-time payment service, but the distinguishing factor is that IMPS is available 24⁄7 and you can avail the service even on bank holidays. Using IMPS, you can transfer comparatively lower amounts, up to Rs. 2 lakhs, instantly.
So, you can think of IMPS as the fund transfer mode that has the best features of both RTGS and NEFT. You can transfer amounts as low as you want, any time you want, with instant results. Though IMPS services are mostly used online, a few banks offer SMS services. Check with your bank to see if they support IMPS transfers via SMS.
The IMPS service is offered by the National Payments Corporation of India (NPCI). Their services allow customers to transfer funds through both banks and Prepaid Payment Instrument (PPI) issuers. PPIs are instruments that allow you to purchase goods and services or initiate fund transfers using the value that is stored in the PPI. Some examples of PPIs include smart cards, magnetic stripe cards, digital wallets, and vouchers. Individuals without bank accounts can transfer funds by IMPS using PPI.
– How to do IMPS transfer
To transfer funds via IMPS, you should first register for the mobile banking service of the concerned bank and generate a Mobile Money Identifier (MMID) and MPIN from the bank. You should make sure that your beneficiary or recipient has the MMID too.
Once you’ve registered, log in to your net banking portal and select IMPS as the preferred mode of transfer. Then you should fill in details like the recipient’s mobile number, the recipient’s MMID, the amount to be transferred, and your MPIN. Once this is done, you will receive a confirmation message via SMS.
Advantages and benefits of online money transfer services
Online fund transfers are reliable, fast, and convenient. Using these services, you can transfer funds easily without having to wait in long queues to withdraw cash or try to be physically present at the bank. They also offer choice and flexibility — if you consider factors like the value of funds you want to transfer, transaction speed, cost and timing, you can select the service that suits your needs best for each transaction.
Still having trouble completing vendor payments?
If you’re using Zoho Books, you can carry out B2B payments right from your Zoho Books account as soon as you receive a bill from your vendor. All you have to do is enter the amount to be transferred, the recipient’s name, and account number. Then choose NEFT, RTGS, or IMPS as the preferred transaction type and click Send. It’s simple! You can even track the status of your transaction (processed or in progress) once you’ve initiated the transfer.
Having an accounting system that incorporates the different online fund transfer modes will simplify your payment process even more. With Zoho Books, you can carry out B2B payments right from your accounting software as soon as you receive a bill from your vendor. You can also offer these convenient payment options to your customers, and get paid quicker. Try our free accounting software today to manage your cashflow with greater cognizance.