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IMPS - Immediate Payment Service

IMPS - Immediate Payment Service

Money is one of the important components of life. Sometimes when our loved ones are in urgent need of money, a money transfer is one of the best, easiest and quickest ways to help them. But in a country like India, bank transfer services like NEFT or RTGS often take too much time, which can be an issue. This was such a big challenge faced by the Indian banking services or the corporate world's payments. So, to improve this situation, NPCI (National Payment Corporation of India) launched a service of IMPS, an electronic fund mobile banking service by the banks for immediate payments.

What is an IMPS?

IMPS or the Immediate Payment Service is an interbank electronic fund's services which are especially working in India, and these services are reliable and fast. The best thing about IMPS is it works on mobile and is available at all times (24*7). To use this service, the sender must know the receiver's bank account number and IFSC code (Indian Financial System Code).

In India, all the well-known banks like State Bank of India, Bank of India, Union Bank of India, ICIC Bank, Yes Bank, Axis Bank, and HDFC Bank and moreover nearby 53 commercial banks, 101 rural banks/ district/ Urban banks, 24 prepaid payment instruments in India ( PPI) are using this service.

In this country (India) per month, nearly 200 million transactions happen; if we talk about credits, 20 billion (rough amount) of money transactions happens in India every month.

Some History about IMPS

NPCI started the service of IMPS in August 2010. In the beginning, the IMPS service provided to four members (State bank of India, Bank of India, later yes Bank, Axis Bank, and HDFC bank) who joined them in September 2010. The DG RBI Smt. Shyamla Gopinath publicly launched the IMPS service on 22nd of the November in 2010 in Mumbai.

What are the main objectives of the IMPS service?

The IMPS service is working successfully across India, with few main objectives given below.

  • To make bank transactions easier for the consumers with the help of gadgets like mobile for the access of their bank account or refund from home.
  • With the help of IMPS, the access of accounts gets less complicated, like just with a mobile number.
  • To support the Indian government and RBI (Reserve Bank of India) in making India Digital for the payments and transactions.
  • To make the mobile payment in India (as it was already introduced in 2008 by RBI) more secure and reliable for the country.
  • To create a strong and complete base for the mobile transfer in India.
  • To make bank transfers less time consuming and consumer-friendly.

What are the main units or participants of the IMPS?

There are four main units or participants of the IMPS, which are compulsory of the transactions by the IMPS Service.

1. Remitter

Remitters are the senders who are using the services to send the money or make the payments to someone. These are the primary units for the transactions.

2. Beneficiary

Beneficiaries are the receivers who get benefits due to the services. These are the end-users of the service.

3. Banks

The banks must have the IMPS services and also may have enough security for safe transactions.

4. NPCI (National Financial Switch)

All this work of transactions is done under the NPCI. They keep all the information about all the transactions that happen across the country.

Who are the live members of the IMPS services?

The banks or payment Applications that are supporting the IMPS services and are registered by the National Payment Corporation of India (NPCI) are known as the live members of the IMPS service. These are the current live members of the IMPS in India;

1. The private, public and payment banks

Private and public banks like (Axis Bank, Bank of Baroda, Bank of India, Bank of Maharashtra, Canara Bank, Central Bank, City Bank, HDFC Bank, ICIC Bank, Kotak Mahindra Bank, Punjab National Bank, and State Bank of India, Union Bank, IDFC bank, etc.) are live members of the IMPS service.

2. The RRB's Bank

The banks of the Rural Area like (Dakshin Bihar Gramin Bank, Baroda Uttar Pradesh Gramin Bank, Utkal Gramin Bank, Baroda Gramin Bank, Uttrakhand Gramin Bank, Sarva UP Gramin Bank, Paschim Banga Gramin Bank, Assam Gramin bank, and Tripura Gramin Bank etc.) are the live members of the IMPS service.

3. Co-operative Banks

There are many Co-operative Banks (Cosmos Bank, the Nainital Bank LTD, Janata sahakari Bank, Apna Sahakari Bank, Rajapur Urban Co-operative Bank, etc.) that support the service of IMPS.

4. Small financial banks

Ujjwal Small Finance Bank, ESAF Small Finance Bank, Utkarsh Small Finance Bank, Jana Small finance bank etc., are some finance banks with IMPS service.

5. PPI's (prepaid payment instruments in India)

Some payment apps or methods like Muthoot Finance Bank, PAYTM, One MobiKwik system Pvt. Ltd, Phone pe Pvt. Ltd, etc., support IMPS.

What are the main steps for using the IMPS services?

Registration process of the sender:

  1. First of all, they need to register themselves for the mobile banking services of their Bank.
  2. Then they get a Mobile Money Identifier (MMID) and MPIN from the Bank.
  3. The last step is to download the software or applications for the mobile banking offered by their banks (make sure your mobile is capable of keeping it), or some banks also provide SMS IMPS services so you can also use it if your bank offers it.

Registration process of the receiver:

  1. You have to link your mobile number to the respective Bank.
  2. The last step is to get the Mobile money identifier (MMID) from the Bank.

Steps for sender while sending money:

  1. Log in to the application.
  2. Select IMPS from the IMPS menu or SMS facilities if your Bank offers these services of IMPS on SMS.
  3. Get the receiver's mobile numbers and MMID.
  4. Put the receiver mobile number, sender's MMID, Amount and your MPIN to drive.
  5. Wait for the confirmation SMS for the debit of your account.
  6. The receiver will also get an SMS for the credit in his account.
  7. Keep or note the reference number for any future issue.

Steps to receive money

  1. You have to share your mobile number or MMID with the sender.
  2. Ask the sender to send you money using them
  3. Check the SMS of the credit in your bank account
  4. Keep the reference number for the future.

IMPS through Account Number and IFS code

The transactions of the IMPS is done through the MMID + Mobile Number, but in few cases, sometimes the sender faces an issue with the MMID or the sender or receiver's mobile isn't registered with the Bank. At that time, another way the sender can use is the Account Number and the IFSC code. The IMPS transfers can also be done with the help of account numbers and IFSC but it's better to use it only in the case of an emergency.

Precautions while using IMPS services?

There are many case histories about the fraud, and the theft that happened, due to the unawareness or carelessness of the consumers while making online bank transactions. So while using these services, you need to be careful about some important facts, which are as follows;

  • Never share your credit card details such as credit card number, CVV number or expiry date with anyone.
  • Do not share any OTP that you receive.
  • Never share or forward your SMS to unknown numbers
  • Do not share your login details for net/mobile with anyone
  • Sometimes people can easily hack your devices, so be careful while saving your details to the mobile.

Advantages and disadvantages of the IMPS services?

IMPS - Immediate Payment Service

Everything that works must have cons and pros. The same goes for IMPS services. They are created to support users and make things easier for them, but little carelessness may lead to big harm to the users. These are the main advantage or disadvantages of the IMPS services;

Advantages of IMPS

  • IMPS services are a safe, secure and easier way to transfer money.
  • It is a 24 hour and seven days/week service. Even if there is a bank holiday, IMPS service works.
  • The fund service can be done by using MMID, Aadhar Number, and mobile numbers.
  • This is a cost-effective service.
  • IMPS can be easily used without using the account number or IFSC.
  • IMPS services work from mobile banking, SMS, USSD and even from the ATM.
  • The money transactions can be done within a few seconds.
  • IMPS services serve the credit card and debit card conformations just by the mobile SMS service.
  • IMPS services allow you transactions over two lakhs.
  • There is no minimum transaction limit in IMPS services.
  • In the IMPS, the user can make intrabank as well as interbank transfers.
  • The transactions in IMPS services allow NRI's to transfer the money from the NRI bank Account to the Indian bank account.
  • In the IMPS Services, the transactions can be done as merchant payments at any time of the day.
  • Some bank charges 5 rupees for the IMPS services but some banks like City Bank etc. do not charge any money for the transactions.

Disadvantages of the IMPS

  • Transaction limits may vary from bank to bank.
  • It is important to be careful and delete all the details of your mobile applications while changing your mobile handset, otherwise you may fall victim to online fraud and may lose your hard-earned money.
  • There is a huge service charge on these services.

What is the difference between NEFT and IMPS services?

NEFT and IMPS services work for 24 hours and seven days a week, but the major difference between both is that IMPS services are really quick and individual, whereas the NEFT services work along with branches. One other difference is that IMPS Service is only an online service, but the NEFT services can be used online and offline (from Banks).

If you don't know what is NEFT here is the definition:

NEFT (National Electronic fund transfer) is a payment service offered by the Reserve Bank of India, allowing electronic transactions from one account to another.

What is the difference between RTGS and IMPS?

The biggest difference between RTGS and IMPS is IMPS don't have any limit of transactions, whereas the RTGS works for more than or equal to 2 lakh. Another difference between RTGS and IMPS is management. RTGS is managed by the Reserve bank of India, whereas the IMPS is managed by the National Payment Corporation of India.

If you don't know what the RTGS is:

RTGS (Real Time Gross Settlement) is used for high amount transactions. It is also used for the immediate transfer of funds from one account to another account. The transaction done is accepted for the real-time and gross investments. The most important thing to note for the RTGS service is that it only works for equal to or more than 2 lakh.

Some Important points to remember about the IMPS

  • IMPS are used for immediate payments through mobile or ATMs without going to the Bank.
  • There is no minimum payment limit; we can even transfer 1 rupee with this service.
  • The Maximum transfer limit is 2 lakh.
  • Both of the banks should be pre-registered at the National Payment Corporation of India (NPCI) for IMPS services.
  • Some banks allow mobile SMS services for IMPS.
  • There is a GST of 18% at the IMPS service.
  • Some banks charge a small fee amount for the IMPS service, whereas some offer free services.
  • Some third-party Applications like PAYTM also provides IMPS services.
  • The Immediate Payment Service is economical as well as very secure.
  • There are currently 639 members, including the small financial Banks, Public Sector Banks, Private Banks and Payment banks, and some PPIs supporting or using the IMPS services.
  • Always remember to be careful with the bank details as do not share them with anyone and be aware while making any kind of mobile or bank transaction.

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