India's Instant Payment System IMPS in Detail

India's Immediate Payment System (IMPS, Immediate Payment Service) is a real-time fund transfer service launched by the National Payments Corporation of India (NPCI) that allows users to make instant inter-bank transfers 24/7 via mobile phones, the internet, or bank branches. Here is a detailed explanation of IMPS:

1. Core features of IMPS

• on-line processing: Funds arrive in seconds, no waiting.
• Year-round: 24-hour operation, including holidays and weekends.
• Multi-Channel Access::
  • Mobile Banking (MMID + Mobile Number)
  • Internet Banking (IFSC + Account Number)
  • ATM/USSD Code (*99#).
• Microefficiency: The single transaction limit is usually ₹50,000 (may be lower in some banks).

2. Key elements of IMPS

• MMID (Mobile Money Identifier)
  A 7-digit unique number assigned by your bank and tied to your mobile phone number for mobile transfers.
• IFSC (Indian Financial System Code)
  An 11-digit alphanumeric code that identifies the branch where the payee has an account.
• trading limit
  Each bank sets its own limit (e.g. HDFC single limit ₹2 lakh; SBI allows ₹5 lakh).

3. Scenarios for the use of IMPS

1. Person-to-person transfers: Quick cost-sharing among friends or family remittances.
2. Emergency payments: Scenarios where medical bills, bills, etc. need to be instantly available.
3. E-commerce and small businesses: Alternative to cash for small collections.

4. IMPS vs UPI vs NEFT

💡 draw attention to sth.: UPI is built on the IMPS infrastructure but is more flexible.

5. How do I initiate an IMPS transaction?

(A) via mobile phone number + MMID

1️⃣Login to Mobile Banking → Select "IMPS" option.
2️⃣ Enter the payee's mobile phone number and MMID.
3️⃣ Enter the amount and MPIN to confirm.

(B) Pass-through account + IFSC

1️⃣Internet Banking, select "Fund Transfer" → "IMPS".
2️⃣ Fill in the payee account, IFSC and amount.
3️⃣ Authorisation with OTP/Double Authentication.

6.*Cost structure

Most banks have IMps fees of:

6. Cost structure (continued)

Most banks charge the following fees for IMPS transactions (varies from bank to bank):

• Some public sector banks (e.g. SBI) waive charges on small transfers.
• Private banks (e.g. HDFC, ICICI) may charge higher fees.

⚠️ take note of: There are no fees to be paid by the recipient and NPCI does not charge the user directly; the fees are determined by the originating bank.

7. Analysis of the advantages and disadvantages of IMPS

✅ vantage

• prompt settlement: Faster than NEFT/RTGS for urgent needs.
• Available 24/7: Not subject to bank opening hours or holidays.
• wide coverage: Supported by almost all Indian commercial banks and some co-operative banks.

❌ drawbacks

• Lower limits: Not suitable for large transfers (need to switch to RTGS).
• Dependency on MMID/IFSC: Incorrect information may cause the transfer to fail or funds to be held up.