IMPS: Instant Money Transfer Explained with Limits Fees and More

IMPS is a crucial method of digital payments. In December 2022, a daily ₹16,700–22,000 crore was transferred via IMPS every week, which goes to show the extreme importance of this transfer method. 

The rise in IMPS shows how much businesses value the instant movement of money, whether it is for receiving payments for goods, paying salaries, or clearing bills. 

Managed by the NPCI, IMPS is a safe, convenient, and simple way of transferring money for everyone who has a mobile number, bank account and an internet connection. 

In this article, we will cover what is IMPS, its benefits, challenges, best practices, use cases and regulatory requirements. 

IMPS stands for Immediate Payment Service. It can be described as an interbank system that transfers funds electronically in India. With IMPS, you can instantly transfer money through mobile banking, digital payments, and different banking channels. It is a fast, secure, and convenient method of transferring money. 

IMPS is managed by the National Payments Corporation of India (NPCI). By linking bank accounts through mobile numbers or Aadhaar, users can send, receive, and settle money anytime seamlessly. It is one of the most convenient money transfer methods in India due to its instant settlement and flexibility. 

IMPS transfers can either be made through a user’s mobile number and MMID or their account number and IFSC code. 

MMID, or the Mobile Money Identifier, refers to a seven-digit code that is linked to a beneficiary’s mobile number.  IFSC code, or the Indian Financial System Code, is an eleven-character alphanumeric code that can be used as a unique identifier for bank branches in India. 

1. IMPS via mobile number and MMID

This requires the sender’s and recipient’s mobile numbers and MMID. Both the sender and recipient need to have their mobile numbers registered with their banks. To initiate a transfer, you need to request an MMID from your bank. By receiving the recipient’s MMID, the transaction can be completed. 

2. IMPS via account number and IFSC code

You can also transfer money by using the bank account number, bank name, and IFSC code of the beneficiary. This is a suitable option for those whose mobile number is not registered with the bank.     

Any resident with a savings account and Internet or mobile banking facilities is eligible for IMPS. To use IMPS, an individual must have a bank account as well as access to digital payments or mobile banking.  

The transfers might require MMIDs of both the recipients and the senders. Along with this, the banks must also meet RBI standards and have proper credentials. 

IMPS daily limit is from ₹1 to ₹5 lakhs. It is a 24/7 process.  They might vary according to banks, but on the whole, they remain the same.

1. IMPS daily limit

For IMPS, the RBI allows a maximum of ₹5 lakhs and a minimum of ₹1 to be transacted daily. This allows for convenient and secure transactions. 

2. IMPS transfer time

IMPS is a 24/7 service that allows instant money transfers between banks. Sometimes, for security reasons, banks might restrict the timings from 8:00 a.m. to 8:00 p.m. For failed or void transactions, the resolution might take up to five working days.

IMPS can charge any amount from ₹3.50 to ₹15 plus GST, depending on the transaction amount and your bank’s conditions. You should check with the bank to confirm the transaction charge. 

1. For ₹0 - ₹1,000

The charge for this amount is ₹3.50 + GST.

For example, sending ₹800 will cost ₹3.50 + GST.

2. For ₹1001 - ₹1,00,000

The charge on this amount is ₹5 + GST.

For example, sending ₹50,000 will cost ₹5 + GST.

3. For above ₹1,00,000

The charges are ₹15 + GST.

For example, sending ₹1,50,000 will cost ₹15 + GST.

IMPS works for fund transfers through a step-by-step process which includes initiation, message and transmission, routing and validation, authorization and funds debit, and settlement and crediting.

1. Initiation

The sender first uses a banking channel such as a mobile app, NetBanking, or ATM to initiate the transfer. The need to use either an MPIN or an OTP.

2. Message transmission

The transfer details are transmitted to NPCI securely by using the IMPS Switch.

3. Routing and validation

The NPCI sends the message to the sender or the beneficiary’s bank. They also validate the bank details and balances. 

4. Authorization and funds debit

After verification, the NPCI authorizes the sender’s bank, debits the amount from the account, and updates the record. 

5. Settlement and crediting

Finally, the NPCI clears the funds, credits the money to the recipient's account, and sends both parties a confirmation.

Some key features of IMPS are instant transfers, secure transactions, multiple platforms and modes, real-time alerts and URN, along with P2M payments. 

1. Instant transfers

IMPS allows the transfers of funds to occur at any time, including weekends and holidays. There are no processing delays. 

2. Secure transactions

By using OTP and encryption, IMPS makes sure that interbank transfers are safe.

3. Multiple platforms and modes

IMPS can be accessed through different banking channels, such as mobile apps, NetBanking, and ATMs. It also offers more flexibility by supporting UPI, MMID, and Aadhar details.

4. Real-time alerts 

Both the sender and recipient can receive instant notifications regarding the credit and debit of money. A Transaction Reference Number, also called TRN or UTR, is also shared to help track the payments. 

5. P2M payments

IMPS supports Person-to-Merchant payments, such as bill payments, shopping, ticketing, insurance and education fees.

The registration process for IMPS is simple and includes a few steps, such as registration, receiving an MMID number, and downloading an app for the SMS feature.

Step 1

The first thing you need to do is obtain the MMID and MPIN using your bank’s mobile banking service.

Step 2

After the bank has provided you with the MMID and mobile banking personal identification number (MPIN), you can download a mobile app. This app can help in using the SMS facility in case the bank offers SMS IMPS.

Step 3

The last step is to make sure that both the recipient and sender have an MMID and an MPIN to ensure successful transactions. 

Money can be transferred via IMPS through different mobile channels such as mobile apps, NetBanking, ATM, and even SMS. 

1. IMPS via mobile or NetBanking

The steps to transfer money through IMPS via mobile or NetBanking are mentioned below:

• Log in to your bank’s mobile or net banking platform
• Go to “Fund Transfer” 
• Select IMPS
• Enter beneficiary details (MMID/account number) 
• Specify amount
• Authenticate using MPIN or password    

2. IMPS via ATMs

The steps to transfer money via IMPS through ATMs can be seen below:

• At an ATM, select IMPS
• Enter the beneficiary’s mobile number, MMID, and amount
• Confirm the transfer using your debit card and PIN

3. IMPS via SMS

Some banks even allow transfers through SMS. A text can be sent to the bank’s designated number with the beneficiary’s MMID mentioned.

IMPS P2A transfer refers to IMPS from a person to an account. This means that the money is sent instantly using the recipient’s bank number and IFSC code.

This ensures a secure and quick transfer, especially for urgent or routine payments. 

IMPS P2P transfers are a secure way to transfer money from person to person using the beneficiary’s mobile number and MMID. 

There are around 56 banks participating in the IMPS network. Some of them are:

• Axis Bank
• Bank of India 
• Central Bank of India 
• HDFC Bank 
• ICICI Bank
• Kotak Mahindra Bank
• State Bank of India 
• Union Bank of India 

The benefits of IMPS in modern banking and business transactions include instant transfers anytime, secure transactions, availability across platforms, multiple payment options, real-time alerts, and versatile usage.

1. Instant transfers anytime

The money is credited to the recipient instantly, 24/7. This includes weekends and bank holidays.

2. Safe and secure transactions

Each transaction’s security is measured through verification from OTP and encryption. 

3. Available across platforms

IMPS can be used across multiple banking channels such as mobile apps, NetBanking, and ATM, making it extremely convenient.

4. Multiple payment options

IMPS transfers can be made using different methods, such as through mobile number and MMID or bank account number and IFSC code.

5. Real-time alerts

After successful transactions, both the sender and receiver are instantly notified. 

6. Versatile usage

It can be used for various purposes such as online shopping, merchant payments, and other mobile banking transactions.

IMPS uses different banking channels to allow instant and secure money transfers to be available everywhere at all times. 

• Retailers and e-commerce platforms can receive payments from consumers and settle or refund amounts in a simple way. 

• Educational institutions can collect fees from their students in a secure manner.

• SMEs can settle payments and simplify fund transfers easily.

Certain important factors to consider for IMPS are the presence of mobile banking, MMID, beneficiary details, and internet connection. These will ensure that the IMPS transactions are smooth and successful:

• Mobile banking is necessary for IMPS money transfers, as it helps in generating the MMID for both the sender and recipient. 

• Beneficiary details like bank account number, IFSC code, mobile number and MMID, and recipient name are required to ensure that the money is going to the right place.

• Since IMPS is an online process, an internet connection is also important. 

The challenges involved in using IMPS for high-value transactions include transaction limits, limited bank support, security concerns, service availability issues, accessibility constraints, authentication challenges, and complexity for non-tech-savvy users. 

1. Transaction limitations

IMPS is not suitable for extremely large fund transactions as the maximum daily transaction limit is capped at ₹5 lakhs.

2. Limited bank support

A lot of banks in India do not support IMPS, which might reduce the overall usefulness for Indian users. 

3. Security concerns

IMPS is prone to fraud, such as hacking or other online risks. 

4. Service availability issues

Sometimes, due to glitches or maintenance, IMPS can be temporarily unavailable. 

5. Accessibility constraints

IMPS is mainly available on mobile devices with an internet connection and active mobile numbers for both senders and recipients.

6. Authentication challenges

IMPS might involve authentication and verification steps that can be time-consuming, such as OTP and isometric verification. 

7. Complexity for non-tech-savvy users

Users who are unfamiliar with mobile banking apps might find IMPS confusing and difficult to navigate. 

Some best practices for leveraging IMPS effectively can be divided into before the transaction, during the transaction, and after the transaction. It can include:

1. Before the transaction

Before the transaction process begins, you should properly verify beneficiary details. Check the amount being transferred and make sure you have a secure internet connection.

2. During the transaction

During the transaction, avoid sharing the OTP with anyone. Also, make sure you select the right banking channel.

3. After the transaction

Finally, once the transaction goes through, monitor your account to check if the money has been debited or credited. Opting for SMS alerts can make the process much easier.

IMPS can be compared to National Electronic Funds Transfer (NEFT), Real-Time Gross Settlement (RTGS), and Unified Payments Interface (UPI) based on transfer speed, availability, transaction limit, and transfer charges. 

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Some regulatory and security considerations for IMPS transactions are identity verification, biometric authentication, behavior analytics, and fraud prevention software.

1. Identity verification

This allows the user’s identity to be verified and authenticated by collecting government documents and analyzing them.

2. Biometric authentication

This can be done through fingerprints, face scans, and voice recognition. This makes accessing bank accounts difficult for hackers or scammers.

3. Behavior analytics     

These help in monitoring user activity patterns. When the spending deviates from normal, an alert is sent to indicate potential fraud. 

4. Fraud prevention software

This provides a well-rounded defense system. It helps in processing data in real time, learning new patterns, and continuously evolving and adapting to fraud attempts.