What Is IMPS – Immediate Payment Service?

Immediate Payment Service (IMPS) is a money transfer system in the Indian banking system. It allows you to make 24/7 real-time electronic interbank funds transfers like the existing RTGS and NEFT facilities. Users can use the facility through multiple channels, including ATMs, mobile phones, SMS, and the internet.

The system is built on the NFS, National Financial Switch, managed by the National Payments Corporation of India. It is approved by the RBI – Reserve Bank of India. The payment service was launched in 2012 as a program by NPCI, with only four banks offering the facility. These include the Bank of India, State Bank of India, ICICI Bank, and Union Bank of India. However, the number has grown to more than 150 banks.

NPCI expanded IMPS to include HDFC Bank, YES Bank, and Axis Bank the same year. On November 22nd, 2012, IMPS went public, and it now comprises 50+ commercial banks, cooperative banks, and 101 districts banks.

What Is IMPS in Banking?

As mentioned earlier, IMPS is a payment service that ensures users can make real-time interbank funds transfers similar to NEFT. However, unlike the NEFT service, users can transfer funds instantly, even on holidays, using IMPS.

IMPS looks to make electronic money transfer easier and more convenient for users. To provide support to the RBI’s goal of digitization of retail payments, IMPS has built a foundation with a complete collection of mobile banking services.

As a result, there are around four main participating parties in one IMPS transaction, including Remitter, Beneficiary, Banks, and National Financial Switch.

Remitter

This party is the one that initiates the transaction. They are involved in sending the funds from their bank account to another. This can be an individual or a corporation.

Beneficiary

The beneficiary is the receiver of the funds. They are on the other side waiting to get the money from the remitter’s bank through the IMPS service. They can also be individuals or corporations.

Banks

The banks are the institutions involved in the transaction. The IMPS service is connected to the banks. Once the remitter initiates the transaction, it is sent from their banks to the receiver’s bank instantly with IMPS.

National Financial Switch

The National Financial Switch (NFS) is a service that enables cardholders of each participating member bank to use the NFS networked cash recyclers. The objective is to ensure that non-scheduled cooperative banks and regional rural banks have access to the vast network of ATMs in the country. In that case, remitters can initiate IMPS transactions using these ATMs across the country.

How to Transfer Funds Using IMPS?

If you start an IMPS transaction, the steps are pretty straightforward. To make any IMPS money transfer, you can use the following methods; mobile phones using SMS, smartphones with net banking or mobile application, computers through internet banking, and ATMs with your bank card.

Mobile Banking

To use mobile banking to complete an IMPS transaction using mobile banking, you need to choose between SMS, mobile app, or net banking. To use the mobile app, you need to register, and after that, open the app to send funds to the beneficiary.

Internet Banking

For internet banking, you need to register with your bank’s internet banking facility to easily log on to the internet banking page of your bank to start transferring funds.

ATM

If you do not have access to internet banking or mobile banking, you can go to the closest ATM on your bank’s network to transfer the money. With ATMs, you can initiate the IMPS transaction together with other features like withdrawing money and checking your account balance.

Whatever method you decide to use, the general procedure for making an IMPS transfer is as follows.

• Select the channel you would like to use to transfer money and enter your details
• Enter the MMID (Mobile Money Identifier) and the recipient’s mobile number. Or, you can provide the bank account number and Aadhaar or IFSC number.
• Enter the amount you want to transfer
• Enter the purpose for the money transfer
• Enter your PIN to confirm the transfer request
• The transfer is initiated instantly. Once this is done, the sender and receive would get an SMS to confirm the transaction.

IMPS Key Features

IMPS has different key features that help it facilitate instant remittance. In that case, here are five key features of the payment service.

On The Go 24/7 Fund Transfer

One of the main key features of the IMPS is on-the-go funds transfers. You can transfer money to another bank even when commuting to your office or back home.

Mobile and Internet Transfer

IMPS transfers can be done using your mobile bank app, SMS, or internet banking. So, depending on the device you want to use, you are good to go.

Instant Settlement of Funds

Once a transaction is initiated through IMPS, it is settled instantly. There is no wait, and the beneficiary receives funds instantly.

SMS Confirmation

The sender and receiver get an SMS confirmation once the IMPS transaction is completed.

Fast, Secure, and Convenient Transaction

IMPS payments are fast, secure, and convenient for both the sender and the receiver.

Important Things to Know About IMPS

When it comes to IMPS, there are a few things that you need to know, which have been highlighted in this section.

Allowing the IMPS Service on Your Bank Account

To use the IMPS service on your account, you should register for mobile app banking. However, for ATM, internet, and bank branch modes, mobile registration is not needed. You can receive money through IMPS using the unique MMID you got from your bank by sharing it with the remitter. You can also share your IFSC code and account number with the sender.

Getting Money Through IMPS With an Unregistered Phone Number

It is not possible to receive money through IMPS without a registered phone number with your bank account. You are only allowed to use a registered or authorised mobile number linked to your bank account.

Linking Many Accounts to a Single Phone number

You can connect multiple accounts to the same phone number. But each bank account number will come with different MMIDs. If you change your phone number, you have to update the bank about the new phone number and re-register it for mobile banking.

Final Thoughts

This guide certainly gives you a good idea of what IMPS is and how to use it. The service is one of the fastest and safest funds transfer facilitators. It is a cost-effective mode of transferring a substantial amount of money in one transaction. The facility is available even without the presence of the internet, making it even more financially inclusive for individuals. In that case, it is a perfect way to go when you want an easy, fast, and secure funds transfer service.