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Imagine transferring money to a family member at midnight, on a Sunday or even on bank holidays and getting it transferred immediately. This convenience of transferring money comes from IMPS (Immediate Payment Service), which is an important part of India's instant interbank electronic fund transfers. IMPS is one of the major payment methods developed by the National Payments Corporation of India (NPCI).
This service allows people to transfer funds at any time of day, week or year. The transfer process may take place via different channels provided by the banks using an account number or mobile-based credentials. IMPS is appreciated for its fast, convenient and useful transfers. This system also helped India make a step toward a faster cash-free society. Still, people should be aware of transaction limits, bank fees, potential problems with technological processes and cybersecurity issues. Knowing what IMPS is, how it works, what its characteristics are, and comparing it to UPI, NEFT, and RTGS is important.
Evolution of the IMPS
The Immediate Payment Service (IMPS) became an important landmark in India's effort toward real-time digital banking. The initiative was launched in 2010 by NPCI through a pilot project covering a few banks and targeted mainly at mobile banking applications. After successful pilots, IMPS was gradually rolled out across many more banks and customers, enabling real-time fund transfer between accounts of different banks.
Over time, the payment mode grew from just being applicable for mobile banking to ATM, internet banking and other authorised banking channels. Availability of IMPS around the clock, even during weekends and banking holidays, made the service very useful for emergencies. The service also paved way for the rapidly growing payment landscape of India. With more innovative services like UPI coming up, IMPS remained an important part of the instant payment infrastructure of India.
IMPS vs NEFT vs RTGS vs UPI
| Feature | IMPS | NEFT | RTGS | UPI |
|---|---|---|---|---|
| Full Form | Immediate Payment Service | National Electronic Funds Transfer | Real Time Gross Settlement | Unified Payments Interface |
| Speed | Instant | Near real-time | Real-time | Instant |
| Availability | 24×7 | 24×7 | 24×7 | 24×7 |
| Primary Use | Bank-to-bank transfers | Fund transfers | High-value transfers | Everyday digital payments |
| Identification | Account/IFSC, mobile/MMID | Account/IFSC | Account/IFSC | UPI ID/mobile/QR |
The Working Process
IMPS, or Immediate Payment Service, allows users to move money electronically from one bank account to another almost instantaneously. The process is carried out by the banking system along with the IMPS system managed by the National Payments Corporation of India.
Step-by-Step Process of an IMPS Transaction
- Beginning the Transaction: The sender accesses his/her bank's mobile, internet, ATM, or any other banking channel, and provides all the necessary information regarding the beneficiary as well as the amount.
- Authentication by the Bank: The transaction is authenticated by the sender's bank through proper methods, such as an OTP or PIN or other means of security verification.
- Processing through IMPS Channel: Following the completion of the process of authentication, the transaction is processed via the IMPS network.
- Transfer to the Beneficiary's Bank: The IMPS network gets in touch with the beneficiary's bank, and then the specified amount gets credited to the beneficiary's account.
- Instant Confirmation: Confirmation regarding the transaction is received by both the sender and the beneficiary.
Modes of IMPS Transfer
- Mobile Number and MMID: Customers may send money through the mobile number and MMID of the recipient.
- Account Number and IFSC: Money transfer is possible by means of account number and IFSC of the beneficiary.
- Others: As per the bank concerned, IMPS may also be accessible through other authorized mediums such as ATMs, Internet Banking, Mobile banking, etc.
Security Measures
Since IMPS allows instant fund transfers, security precautions are important to ensure that unauthorized and fraudulent transactions do not occur. Many banks and payment services have put measures in place to ensure that their customers are well protected.
Two-Factor Authentication
In IMPS, most transactions usually go through more than one form of authentication and include a login credential and a password or one-time password.
One-Time Passwords (OTPs)
An OTP could be required to confirm some transactions made via the banking system. An OTP is confidential and time-bound, therefore, customers should not give it out to any person, even those who claim to represent the bank.
Secure Banking Channels
Banking should be done using authorized means of doing so, including the banks' official mobile applications, internet banking websites, ATMs and other approved channels. Bank transactions should not be done over public networks.
Transaction Alerts
The banks usually alert customers on transactions via SMS or emails, and this alert is important for the customer.
Customer Precautions to Guard Against Frauds
- Do not give out OTPs, PINs, passwords and other banking details.
- Make sure you check the details of the recipient before proceeding with the transaction.
- Do not click on banking links that appear dubious or download any questionable application.
- Do not allow anyone you do not know access to the device.
- Ensure that banking applications and devices are up to date.
What Should Be Done If An Unauthorised IMPS Transaction Is Done?
If the customer experiences an unauthorised IMPS transaction, they should inform the concerned bank through their respective customer service channels. They should maintain all details related to the transaction. Cyber fraud can also be reported at India's cyber fraud helpline from 1930 or even at the National Cyber Crime Reporting Portal.
Challenges Associated with IMPS
However, the increasing popularity of IMPS (Immediate Payment Service) has some drawbacks that need attention:
- Cyber Crime: Cybercrime like phishing, fake banking applications, social engineering and fraudulent transactions could leave users open to monetary loss.
- Lack of Digital Savviness: Customers not accustomed to digital banking might find difficulty in using IMPS or identifying scams in emails and links.
- Technical Problems: System malfunction, maintenance and failure during processing of transactions could at times result in failed or delayed transactions.
- Poor Connectivity: Internet or mobile network problems, especially in rural and far-flung places, could limit customers from availing instant digital payment.
- Customer Data Security and Privacy: Customer data should be protected from cyber attacks, data leaks and misuses.
- Limited Accessibility: Customers who do not have smartphones, proper internet access, bank accounts or digital literacy will be left out of the system.
FAQs
What is IMPS?
IMPS is an instant interbank electronic fund transfer service that enables users to transfer funds instantly and securely.
What is the full form of IMPS?
Immediate Payment Services is the full form of IMPS, which is an instant interbank electronic fund transfer system.
Who runs the IMPS service in India?
IMPS is run by the National Payments Corporation of India, which enables real-time interbank transfers of funds throughout India.
Is IMPS service available 24×7?
Yes, IMPS is available 24×7 throughout the year, even on Sundays and bank holidays.
What is the transaction limit for IMPS?
The usual IMPS transaction limit per transaction is ₹5 lakh excluding SMS/IVR channels.
How soon does an IMPS transaction get processed?
Since IMPS transactions are in real-time mode, the amount gets credited immediately after successful authentication.
Does IMPS function on bank holidays?
Yes, IMPS operates on bank holidays, thus helping customers make instant money transfers without worrying about banking days.
What information is required for making an IMPS transfer?
Depending on how IMPS is used, it requires either the account number and IFSC of the recipient or mobile number and MMID of the beneficiary.
What is the difference between IMPS and UPI?
While IMPS mainly serves to transfer money from bank accounts, UPI allows making instant payments using the UPI ID, QR code, and more than one account.
What is the difference between IMPS and NEFT?
Unlike NEFT, which follows certain cycles of transaction processing, IMPS provides instant transactions; but unlike NEFT, IMPS is not round-the-clock.
Is IMPS safe for online money transactions?
Yes, IMPS uses the same safety measures as banking services; however, it is necessary for the customer to safeguard login information.
Can an IMPS transaction be reversed?
No, generally speaking, a successful IMPS transaction cannot be reversed; one needs to call their bank right away.
Is there an IMPS transaction fee?
IMPS fee charged by banks may vary according to the amount and channel used for the transaction.
