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For IMPS registered phone number and MMID id of the account holder are required.

The Indian economy has witnessed a shift after demonetisation in 2016. Digital transactions gradually carved out significant room replacing physical transactions and the fintech sector is booming. One can send or receive the money within a second and most transactions are free currently. Recently RBI has decided to waive off the charges of RTGS and NEFT. But there is a technology, called IMPS or Immediate Payment Service that levies a charge for every transaction. But IMPS has some advantages over NEFT and RTGS.

What is IMPS

In the true sense, IMPS works as a real-time transaction. Once one can process a payment request, almost immediately the amount is debited from the account and credited to the beneficiary’s account.

But NEFT or RTGS generally takes 30 minutes to 120 minutes to process the payment. But IMPS takes 30 seconds. That is why it’s called an immediate payment service.

Charges of IMPS

Almost all banks charge an amount from the customers using this system. IMPS charges are largely subject to the amount which is being transferred along with the bank’s policies. However, the regular IMPS charges range from Rs 2.50 to Rs 25 for amounts of Rs 10,000 to Rs 5 lakh.

However, currently, there is a transaction cap of Rs 5 lakh for IMPS, any transaction more than Rs 5 lakh will not get processed and will be credited back into the payee’s account. RBI has raised the limit to Rs 5 lakh from the previous Rs 2 lakh on October 8, 2021.

SBI:- At the onset of the pandemic, SBI has waived off the fee for carrying out all IMPS transactions. So, you do not have to pay any fee on your IMPS transactions.

PNB:- IMPS charges for PNB customers are among the lowest as PNB charges only Rs 5 for transactions up to Rs 1 lakh and Rs 10 for transactions between Rs 1 lakh and Rs 5 lakh. A 5% GST is applicable on this charge.

BoB:- The third-largest public sector lender Bank of Baroda charges Rs 5 plus GST for IMPS transactions up to Rs 1 lakh. Above Rs 1 lakh the charge is Rs 15 plus applicable GST.

HDFC Bank:- The largest private lender HDFC Bank charges a fee for every IMPS transaction. Transaction up to Rs 1,000 attracts Rs 3.5 and GST, the transaction between Rs 1,001 and Rs 1 lakh attracts Rs 5 and GST and transaction up to Rs 5 lakh attracts Rs 15 plus GST.

ICICI Bank:- Transaction up to Rs 1,000 attracts Rs 3.5 and GST, the transaction between Rs 1,001 and Rs 1 lakh attracts Rs 5 and GST and transaction above Rs 1 lakh attracts Rs 15 plus GST.

Axis Bank- Axis bank also charges a fee for all IMPS transactions. Transaction up to Rs 1,000 attracts Rs 2.5 and GST, the transaction between Rs 1,001 and Rs 1 lakh attracts Rs 5 and GST and transaction up to Rs 5 lakh attracts Rs 15 plus GST.

Advantages of IMPS

IMPS is available 24 X 7. Besides, it transfers funds within a second or two what NEFT or RTGS can’t do.

As compared to other modes of funds transfer, IMPS is quite easy to use. You would only require the mobile number (linked to the bank account) and the unique MMID of the receiver to transfer the money.

IMPS is one of the safest mediums of fund transfer. Bank servers are fairly protected through firewalls and IMPS is as secure as NEFT, BHIM or other online transactions. IMPS is not platform-specific, can be done through mobile banking or net banking. Besides, the sender and receiver receive text messages from the bank once the payment gets processed.

Difference from NEFT/ RTGS

An individual can transfer a maximum of Rs 10 lakh through NEFT or RTGS. But through IMPS one can transfer up to Rs 5 lakh. But there is no minimum limit that exists either in NEFT or in IMPS.

For NEFT only an account number and IFSC code are required. For IMPS registered phone numbers and MMID IDs of the account holder are required.

Currently, NEFT is free of cost, where IMPS incurred some charges between Rs 2.5 and Rs 25 plus GST, depending on the transaction amount and the bank’s concern.