The Immediate Payment Service (IMPS) is a 24×7 electronic funds transfer service introduced by the National Payments Corporation of India (NPCI) in 2010. It enables users to instantly transfer money between bank accounts through mobile phones, internet banking and ATMs.
Key Features of IMPS
- 24×7 available interbank electronic funds transfer service
- Real-time transfer of money between bank accounts
- Channels like mobile banking apps, internet banking and ATM used
- Maximum transaction limit of Rs 2 lakh per day
- No minimum or maximum amount restrictions
Network Architecture
IMPS follows a centralized architecture linking the participating bank branches and service providers to a central switch called the IMPS Exchange. This is connected to the NPCI switch and the Reserve Bank large-value payment systems.
Participants in IMPS
- Commercial banks
- Cooperative banks
- Payments banks
- Small finance banks
- PREPAID Payments Instruments Issuers
- ATM networks
- Mobile money service providers
Transaction Charges
Most banks follow NPCI guidelines on IMPS charges:
- Up to ₹1,000: ₹5 + GST
- ₹1,000 to ₹1 lakh: ₹15 + GST
- Above ₹1 lakh to ₹2 lakh: ₹25 + GST
Types of IMPS Transfers
- Person to Person (P2P) Money transfer b/w individual bank accounts
- Person to Merchant (P2M) Payment to registered merchants for purchases
- Remittances Money sent to beneficiaries for various needs
Key Strengths of IMPS
- Convenient 24×7 service
- Real-time transfer and instant settlement
- Secured transactions through 2-factor authentication
- Options of various remittance types
- Interoperability between banks and channels
- Mobile first-approach for expanding services
Year-Wise Growth of IMPS
| Year | Volume (Million) | Value (Rs Billion) |
| 2014 | 122 | 918 |
| 2019 | 782 | 11,841 |
| 2022 | 10078 | 23871 |
As per latest data, 5.93 billion transactions amounting to Rs 79.31 trillion were processed via IMPS in 2022.
Key Benefits of IMPS
Convenience of 24×7 availability
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- Send or receive money anytime
- No holiday or office hours restrictions
Accessibility through multiple channels
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- Mobile apps, internet banking, SMS, ATMs
- Expands outreach across user groups
Cost savings compared to other systems
-
- NEFT, RTGS transfers have higher charges
- Reduced costs for small value transactions
Speed of real-time processing
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- Money credited instantly to recipient
- Enables instant payments for use cases like ecommerce
Interoperability between banks
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- Single channel for transfers across banks
- Easier to integrate for service providers
Scope for Further Adoption
- Enable cross-border outward remittances: Support for international money transfers
- Onboard payment aggregators and fintechs: Encourage innovations in digital payments
- Expand supporting infrastructure: APIs, Payment gateways integration
- Increase limits for transactions: Raise per transaction as well as daily limits
- Enable more use cases: Bill payments, donations, P2G payments etc
Disadvantages and Limitations
Transaction limits imposed by RBI
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- Max per transaction limit of Rs 2 lakhs
- Constrains usage for high-value transactions
Partial availability in regional languages
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- English and Hindi main languages
- Limits adoption in non-English speaking regions
Risk of failed transactions
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- Transaction failures due to network issues
- Poor redressal mechanisms
Related charges and fee still applicable
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- Bank charges additional fees
- Reduces cost competitiveness
Reach of IMPS in India
- Present in almost all banks in India: Public sector, private sector and foreign banks
- Services available across metro and non-metro branches: But higher concentration in urban areas
- Growing adoption among Indian consumers:
- Total registered users over 300 million
- 22% of banked population has used it
- Remains behind cards and UPI in transaction values: IMPS accounts for only 4% transaction value
- Significant growth potential exists: Increasing mobile and internet penetration.
IMPS has emerged as a popular instant digital payment ecosystem in India due to its convenience, security and interoperability across participants. Growing transactions volumes year on year indicates it is also helping the RBI meet its mission of transitioning India to a ‘less-cash’ society. Integration with global remittance systems can further extend its adoption.
