IMPS: Full Form, Benefits, and How This Instant Payment System Works
5 min read | 2 months ago
Savings accounts are the commonest financial products out there today. You’ll find them available at every bank and financial institution. Yet, while setting up a savings account is highly recommended to start your financial journey, you will have to abide by a few regulations regarding the same. This includes sticking to the monthly average balance (MAB) or minimum balance guidelines for your savings account. This means that you cannot withdraw as much as you need, if it ends up violating these guidelines.
If you do not want an account with these restrictions, then a zero balance savings account may be the answer. It is often provided by several small finance banks, NBFCs, and even regular private/public sector banks. Let us look at the key aspects of these accounts below.
IMPS: Full Form and How This Instant Payment System Works
Money transfers to other accounts can now be done conveniently across banks and other financial institutions. One of the most popular and reliable fund transfer methods is IMPS (immediate payment system). Beneficiaries can receive funds in their accounts almost immediately with this system. Here’s taking a closer look at some of the key aspects of this payment system below.
IMPS Key Benefits & Basic Components
IMPS stands for the Immediate Payment System and is a real-time system of transferring funds. It is a 24-7 interbank transfer service that is backed by the NPCI (National Payment Corporation of India). You can also use it across multiple channels such as online and mobile banking. The key attributes of IMPS include the following.
Transactions in Real-Time
The biggest USP of IMPS is real-time transactions. You can transfer money instantly irrespective of where you are or your time zone.
Availability on a 24-7 Basis
IMPS is available on a 24-7 basis for maximum convenience and that too for 365 days in a year. You can thus transfer funds anytime you want, be it on holidays or weekends, and even at various times of the day. Hence, you do not have to adjust your fund transfer schedule based on the operating hours of your bank.
Multiple Initiation Modes
Another benefit of IMPS is that there are several modes for initiating transactions, including net banking, mobile banking, SMS services, and even ATMs.
Wide Range of Transactions
There is adequate support for several kinds of transactions, enabling maximum convenience for users. Along with P2P (person to person) transfers, IMPS also allows direct transfers of funds to specific account numbers. It is called P2A or person to account transfer and does not require a mobile phone number.
Adequate Security & Transfer Limits
IMPS integrates solid security measures for ensuring safe transactions. 2FA or two-factor authentication makes sure that only authorized people can authenticate and initiate fund transfers. At the same time, you can transfer up to Rs. 5 lakh per transaction without any limits on the minimum fund amount. The high limit is another advantage for users.
Easy Remittance from Foreign Countries
Users can easily send money from foreign countries to any bank account through providers who have tie-ups with Indian banks for the IMPS transfer service.
How Does IMPS Work?
Here is a closer look at the internal workings of the IMPS fund transfer process.
P2P Transfer with MMID and Mobile Number-
Mobile Money Identifier (MMID) is a code containing 7 digits that is linked to a mobile phone number. The MMID generation is a one-time affair and several MMIDs may be linked to a single number.
In this scenario, you have to login to your net or mobile banking application, go to the fund transfer option and choose IMPS with P2P transfer. Enter the mobile phone number of the beneficiary and the unique MMID before keying in the amount and authenticating the transaction with either a PIN or 2FA.
P2A Transfers with IFSC and Account Number
In this system, both the sender and recipient have to register their mobile phone numbers with their bank accounts and obtain MMIDs. You have to login to your net banking portal and choose fund transfer before adding the beneficiary with his/her IFSC and bank account number.
Once this is verified, you can select IMPS as your transfer method, choosing the P2A option and the beneficiary of the payment. Put in the transfer amount and authenticate the payment to complete the process.
Transfer Through ATMs
You should find an ATM that offers fund transfer support and once you put in the debit card in the slot, it will prompt you to enter the Pin. Choose either fund transfer or any similar option as shown on the screen and then select the beneficiary. Enter the amount thereafter and authenticate the transaction for collecting the cash and receipt.
Transfer Through SMS
Many banks also allow fund transfers through SMS-es. You should register your mobile phone number with the mobile banking platform for this purpose. You can initiate transfers via SMS by sending a text message to the unique number given by your bank. There is a text format for requesting the transfer that your bank will also provide in advance.
Thereafter, you have to enter the details of the beneficiary, including the account number, transaction amount, IFSC code, and other information.
Conclusion
IPMS ensures ample convenience for instant fund transfers with high limits and adequate security measures. However, make sure you follow all the fund transfer protocols and be aware of the varying limits for multiple transfer methods. This real-time method is not only flexible, but also always dynamic and available on a 24-7 basis.
If you are looking to open a savings bank account, consider Unity Small Finance Bank for its competitive interest rates between 6-7.5% per annum. Low minimum monthly balance requirements, multiple access points, and comprehensive banking solutions are some of the other benefits here.
About Unity Small Finance Bank
Unity Small Finance Bank is committed to making banking simpler and more accessible for everyone. Our services include Savings Account, NRI account, Current Account, Fixed Deposits, and Personal Loans offering flexible tenures and attractive interest rates. We also offer financing options like MSME Loans and Microfinance to support businesses and underserved communities. Learn more about Unity Small Finance Bank here.
