Definition
IMPS stands for Immediate Payment Service. It is an instant real-time inter-bank electronic funds transfer system in India. This service is available 24/7, allowing the electronic transfer of money from one bank to another at any time.
Key Takeaways
- IMPS stands for Immediate Payment Service. It is a money transfer tool in India providing inter-bank electronic fund transfer service. It’s ideal for immediate transactions because it operates 24/7, 365 days a year and in real time.
- IMPS uses mobile phones as a primary medium of transactions along with IFSC codes and MMID (Mobile Money Identifier), allowing customers to have a safer and easier transaction process.
- With IMPS, the transaction limit is rather high. As of now, one can transfer funds up to 2 lakh INR for a single transaction. This is convenient for users when they have to conduct large transactions.
Importance
IMPS, an acronym for Immediate Payment Service, is an essential finance term as it refers to an instant real-time inter-bank digital funds transfer system in India.
Managed by the National Payments Corporation of India (NPCI), IMPS provides a seamless, efficient, and secure method for the transfer of funds anytime, anywhere.
Since it facilitates quick and easy money transactions, the understanding of IMPS becomes vital for anyone dealing with online financial transactions in India.
Moreover, it also aids in broadening financial inclusion by extending instant payment services to the unbanked population of the country.
Therefore, IMPS plays a pre-eminent role in modern banking and e-commerce transactions.
Explanation
IMPS, which stands for Immediate Payment Service, is a real-time interbank electronic funds transfer system in India. This facility could be used both online through net banking services and offline through mobile phones.
The primary purpose of IMPS is to make payment simpler and more efficient, without the restrictions of conventional banking hours. Through IMPS, users can transfer money instantly, 24/7 throughout the year, including bank holidays.
IMPS is incredibly convenient for immediate transactions, such as paying utility bills, transferring money to people in different banks, or even making merchant payments. The service was created to benefit the user by providing a secure and speedy money transfer platform, making banking and transaction processes similar to instant messaging.
Examples of Full Form of IMPS
IMPS stands for Immediate Payment Service. Here are three real-world examples of its usage:
Online Shopping: Suppose you are shopping online and find a product that you’d like to purchase. Using IMPS, you can immediately transfer the payment to the merchant’s bank account, securing your purchase without any delay.
Bill Payments: Many people use IMPS for paying bills like electricity, phone, and internet. Instead of waiting for checks to get cleared or enduring long lines at the bank, payments are made immediately from bank to company.
School Fees: Many educational institutions now accept fees through IMPS. Parents can transfer the school fee directly into the school’s bank account, providing immediate confirmation of payment and avoiding the hassle of handling cash or checks and delivering them physically to the school.
FAQs for Full Form of IMPS
1. What is the Full Form of IMPS?
IMPS stands for Immediate Payment Service. It is an instant interbank electronic funds transfer service available 24×7, throughout the year including Sundays and any bank holiday.
2. Who provides the IMPS service?
IMPS service is provided by an organization called National Payments Corporation of India (NPCI).
3. Is there a minimum or maximum limit for IMPS transfer?
IMPS has a minimum transfer limit of Re. 1 and a maximum transfer limit that varies from bank to bank. Please verify the transfer limit with your bank before proceeding with the transaction.
4. Can I use IMPS service all around the year?
Yes, IMPS service is available 24×7, throughout the year including Sundays and any bank holiday. You can make transactions at any given time and day as per your requirement.
5. Are there any charges for using the IMPS service?
Yes, there are minimal charges implied for using the IMPS service. The charges however may differ from bank to bank. Some banks provide IMPS free of charge while others may have a nominal fee applied. It’s advisable to check with your bank for exact charges.
Related Entrepreneurship Terms
- NEFT: National Electronic Funds Transfer, a nationwide system that facilitates individuals to electronically transfer funds from any bank branch to any individual who has an account with any other bank branch in the country.
- RTGS: Real Time Gross Settlement, a system where the processing of funds transfer instructions takes place in real time (defined as the time when the processing is done at once, rather than in stages).
- UPI: Unified Payments Interface, a real-time payment system developed by National Payments Corporation of India facilitating inter-bank transactions.
- IFSC: Indian Financial System Code, an alphanumeric code that facilitates electronic funds transfer in India.
- MMID: Mobile Money Identifier, a unique 7-digit number issued by banks for the purpose of mobile-based financial transactions.
Sources for More Information
- Reserve Bank of India (RBI): The RBI is India’s central banking institution and could provide reliable information about IMPS.
- Bank Bazaar: BankBazaar is a website that provides information on various financial products, including IMPS.
- Investopedia: Investopedia is a popular site for a wide variety of financial terms and definitions, including IMPS.
- ICICI Bank: A popular international bank, ICICI, may provide more practical explanations and use cases of IMPS.
