In this guide, we will explore how to send funds electronically In India with the help of IMPS and also learn what is IMPS transfer? in detail.
We will also explore how the Immediate Payment Service works and how you can use it to send funds electronically in India.
What is IMPS?
Immediate Payment Service (IMPS) is an electronic payment service that enables individuals and businesses to transfer money instantly between different banks in India using their mobile phones or web-enabled devices.
This allows you to send and receive money in real-time 24 hours per day, seven days per week, using multiple channels such as mobile, internet, ATM, and SMS.
What is IMPS Transfer?
The Immediate Payment Service (IMPS) is an innovative facility of National Electronic Fund Transfer (NEFT), which provides individuals, organizations and small businesses with a fast, secure and reliable payment mechanism for domestic payments.
With IMPS you can transfer funds electronically between banks in real-time 24 hours a day, 7 days a week, using multiple channels such as mobile, internet, ATM, and SMS.
IMPS also offers a safe and economical method of transferring funds between banks in India.
Objectives on IMPS
Fund Transfer using IMPS
What are the benefits Of IMPS Transfers?
Money sent via IMPS gets credited instantly. You can make an IMPS transfer at any time of day or night, 24 hours a day, 365 days a year.
The funds are credited within seconds and reach their destination account immediately.
There’s no need to wait for hours, days, or even weeks like you do with regular bank transfers.
There are multiple channels through which you can make an IMPS transfer – mobile, internet banking, and SMS (for select banks).
You can use IMPS to send funds from one bank account to another within your own bank as well as from one bank account to another at a different financial institution.
The charges for sending money using IMPS are significantly lower than those levied by traditional money transfer services such as Western Union and Moneygram.
Advantages of IMPS Over RTGS
Immediate Payment Service (IMPS) is a fast, effective, efficient and safe system for transferring funds electronically between banks in real-time 24 hours a day, 7 days a week.
Banks can use various channels such as mobile, internet, ATM and SMS to send money.
It was launched by Reserve Bank of India (RBI) on April 16, 2008. Here are advantages of IMPS over Real Time Gross Settlement (RTGS) service provided by RBI:
1. Speed: The RTGS service takes at least one business day while an IMPS transfer happens instantly.
2. Cost: The RTGS service charges Rs. 15 per transaction plus GST where as an IMPS transfer costs only Rs. 1 per transaction plus GST.
3. Convenience: An IMPS transfer can be initiated through multiple channels such as mobile, internet, ATM and SMS.
4. Security: An IMPS transaction is secured with a unique PIN code that makes it difficult for fraudsters to misuse your account information.
5. Accessibility: You can access your bank account using any of these methods:
- Internet banking
- Mobile banking
- ATMs
Advantages of IMPS Over NEFT
The National Electronic Fund Transfer (NEFT) is a similar service offered by banks in India and allows money transfers between banks. NEFT, however, has two major disadvantages.
Firstly, only bank accounts linked to an Indian bank can be used when transferring funds through NEFT; non-residential accounts cannot be linked.
Secondly, while NEFT transactions are usually processed within 2 hours of submission, IMPS transactions are completed immediately upon submission.
Both services have their advantages and disadvantages – it’s up to you which one works best for your business needs! When should I use IMPS? There are several situations where using IMPS could benefit your business.
For example, if you have employees working remotely or on short term projects at other locations, they might not have access to their bank accounts with all of their necessary credentials at hand.
If these individuals need to make purchases on behalf of your company that exceeds a certain amount or fall into certain categories (for example, entertainment), they will need to use another method besides credit cards or cheques.
Difference between IMPS and UPI
IMPS or Immediate Payment Service is an electronic payment system that allows individuals and businesses to transfer funds instantly.
UPI, or Unified Payment Interface, is a payments service developed by NPCI, a bank-owned organization.
In short, they are quite similar but with key differences. Here’s what makes them different and what you can do with each one.
Imps transfer limits: The limit on imps transfers depends on your account balance at both banks, as well as other factors such as whether it’s an individual or business account.
NPCI Security Guarantee Fund: What is it? If your account details have been misused for any imps transaction (if money has been wrongly debited from your account), you need not worry.
You will be refunded from NPCI Security Guarantee Fund up to Rs 1 lakh per month per bank account.
This means if you are the victim of fraud thrice in a month, you will get Rs 3 lakh back; if five times, Rs. 5 lakh; and so on.
Read More: What Is BHIM UPI? – Ultimate Guide On BHIM UPI
Types Of IMPS Transactions & Charges
When you send or receive an IMPS fund transfer, you will be charged an Interbank Sender Fee (ISF) and/or a Receiver Bank Charge (RBC).
The difference between ISF & RBC charges is that, while RBC’s are charged by banks for receiving funds through IMPS, ISF’s are paid by your bank.
Different types of transactions that you can perform using IMPT and their respective charges are mentioned below:
- Balance Enquiry: Free
- Immediate Payment Service (IMPS): Free
- Online Cash Management Account-to-Account Fund Transfer: ₹3 per transaction.
- Money Remittance Service – Immediate Payment Service (IMPS): ₹3 per transaction.
- Money Remittance Service – Real Time Gross Settlement System (RTGS): ₹50 per transaction.
- Mobile Banking Transactions: ₹5 per transaction.
- Mobile Top Up Services: Free
- National Electronic Fund Transfer (NEFT): ₹3 per transaction.
Conclusion
With IMPS, you can transfer funds electronically between banks in real-time 24 hours a day, 7 days a week, using multiple channels such as mobile, internet, ATM, and SMS.
You can send money to anyone with an Indian bank account or receive money from anyone who sends it to your account.
You don’t need any special software or hardware for an IMPS transaction; all you need is your bank account number and IFSC code.
It’s not necessary that both accounts should be held with the same bank; in fact, they may be held with different banks.