In the realm of digital transactions, it is obvious that we can transfer digital money within a fraction of a second or even a minute, no matter where we might be. Due to the advent of technologies and the development of network connections, it has been made possible to have digital, cashless transactions as a more seamless and convenient mode of payment. These specifications are the reasons behind the successful usage of digital payment platforms by people all over India. We are provided with multiple online transaction platforms and applications and are open to choosing the suitable one for our payments. Each app and platform has its own benefits and unique features that help people in numerous ways with payment. Two such payment options are UPI and IMPS. They are widely used platforms by the people, and it is highly significant to know how UPI is different from IMPS. It is time for us to clearly look into the details of UPI and IMPS, their differences and the unique features that make them stand out.

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Let us know what is UPI

Unified Payments Interface is the complete form of UPI, a real-time payment process. It enables you to link multiple bank accounts within its single mobile application and relies on giving a secure and seamless experience of transactions. It was launched in 2016 and has been highly helpful in making payments a piece of cake, thus becoming the common payment platform. With its ease of simple process and versatility, it has made transactions an effortless process. You can make payments from person to person to the merchants for goods and services. You can use your mobile number for payment or even a VPN (Virtual Payment Address).

So, to use UPI linked mode of payment, you only need a bank account linked with your mobile number, a mobile phone and an internet connection to use the application. You need to create the UPI ID and set the password called UPI PIN. The UPI ID can be similar to an email address or have some alphabets or numbers. For example, it might be like these formats: uvwxyz@upi or 987654@upi. After successfully creating the UPI ID, you can set the UPI PIN, the password used for verified and secured transactions. This is because, before you make the payment, the app will ask you to enter the PIN everytime you initiate any transactions, that is specifically before you finalize the payment. This UPI PIN might be either a four-digit or a six-digit PIN, which you need to set once the UPI ID has been successfully generated.

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How UPI works?

Now, it’s time to know how UPI works for a transaction.

1: The initial step is to initiate the transaction by going into the application.

2: After that, you have to select the UPI ID or scan the QR code of the UPI ID to whom you will pay.

3: Once you have selected UPI ID or scanned the QR code, you can enter the amount you want to pay.

4: Now, you have to enter the UPI PIN so that you can process the payment

5: As a final step, you’ll receive a confirmation message regarding the successful transaction

The usage of UPI is very simple; that succeeds in being used by all people, irrespective if one is literate or not.

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Let us know what it is IMPS

Immediate Payment Service, abbreviated as IMPS, is one of the prominent digital transaction platforms. Launched in 2010, it is like UPI, a real-time transaction done with mobile phones with internet facilities or ATMs. It allows you to transfer money from one bank account to another, mostly an inter-bank fund transfer through digital methods. An interesting fact about IMPS is that it is available all the time, including at weekends and even during public holidays. It is also noticeable that the amount will be instantly credited to the receiver or beneficiary’s account.

How IMPS works?

To make a payment via IMPS, you can make IMPS payments in different ways. It can be via net banking or mobile banking, via ATMs and SMS. Or also, you can send money to the beneficiary using their mobile number and MMID. MMID stands for Mobile Money Identifier, and this is a six-digit code which is linked to their mobile number. This MMID will be provided by the bank when you request it. You and the receiver must have linked your mobile number with the bank to transfer money like this.

Another method of sending money apart from mobile numbers with MMID is through the account number and IFSC code (Indian Financial System Code). Here, you can enter the beneficiary details, including their account number, IFSC code, bank name, and branch. This kind of transfer doesn't require you and the receiver to have a mobile number linked to the account.

It is crucial to look at the steps involved in making IMPS transactions. Below are the following steps:

1: You need to open the mobile banking app or the internet banking account

2: Navigate to your home page and click the 'Fund transfer' option, which will be available there

3: You can choose IMPS for the transaction

4: Now, you have to enter the beneficiary details. If you're using the mobile number type, enter the beneficiary's mobile number and MMID. If you're paying with account details, you can fill in their account number, IFSC code, and other relevant details required.

5: Now you can enter how much money you would like to transfer

6: It is always better to verify the details that have been entered before clicking the confirm payment option. Once you have checked the details, you can confirm the payment

7: In some cases, you might receive an OTP to complete transactions. You can enter the OTP, which will be sent to your mobile number

8: The payment will be successful after you enter the OTP or confirm submitting the processing of the transaction

Let’s know how IMPS works with net banking, also called mobile banking. The steps are similar to the above-detailed process. When you enter the beneficiary's mobile number, MMID, or account details and then enter the amount, here, instead of OTP, it will ask you to enter the MPIN or any transaction password set up with your app to validate the transaction. MPIN is nothing but the Mobile Personal Identification Number used as a password or security system in the net banking app. It acts as a login credential to the apps and for various other purposes like authenticating the transaction.

So far, we have seen how to transfer money in the net banking apps for IMPS. Now, let us know how to transfer money via ATM for IMPS. For that, you have to visit the ATM machine of your bank and enter the pin after choosing the preferred language. Navigate to the main menu, choose other services and in thar, select the IMPS fund transfer option. After that, you have to enter the mobile number of the beneficiary. It will ask you to enter the MMID and the amount that needs to be transferred. You can now verify the transaction by selecting the account from which the money needs to be debited. Once completed with this, you can confirm the payment.

IMPS payment option is also available through SMS banking, and it is one of the unique features of it. In an SMS transfer, you have to link the mobile number with your savings bank account. You have to message the number that the respective bank might share. Be shared by the respective bank. You have to type IMPS followed by the beneficiary's account number or IFSC code and the amount that needs to be paid. You are asked to follow the format as suggested by your bank. After that, you can enter the MPIN once you receive the message from your bank. The sender and receiver will get the confirmation message when the transaction is processed successfully.

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Key differences between UPI and IMPS

Even though UPI and IMPS belong to the same category of online money transaction platforms, they have key differences and similarities. It's time to look into the details of how UPI is different from IMPS and make a study of UPS vs. IMPS.

Platform of transaction: For UPI, transactions could be made with UPI-enabled apps like GPay, PhonePe, etc. On the other hand, IMPS payments could be made using mobile banking apps, via net banking services, through ATMs, or even through SMS.

Details required: When making a payment, UPI and IMPS have their own requirements. With UPI, it is simple and easy since it only requires either the UPI ID, mobile number, or QR code to scan and perform the transaction. However, making a payment with IMPS is a little time-consuming since it asks for the beneficiary's account details and IFSC code, which need to be filled out with utmost care and attention.

Transactional limit: This specification might help you better understand how UPI differs from IMPS. The transactional limit varies between UPI and IMPS. You can transfer up to 5 lakh rupees with IMPS, whereas you can pay up to 1 lakh rupees only with UPI. However, the limit of 1 lakh rupees with UPI might vary depending on the bank.

Transactional fee/charge: Upon checking, it is evident that in most cases, UPI doesn't charge you for making small-scale payments. It might charge you in some cases, but the charge will be very low compared to the fee imposed by IMPS. Mostly, IMPS transactions will have nominal charges, and that too varies from bank to bank. If you compare UPI and IMPS, it is UPI that doesn't even charge you for the payments.

Processing time for the payment: Both transaction types are real-time transactions only. UPI is an instant payment option, and IMPS is a real-time payment, but it might have a delay in some rare cases.

Adoption: In general, UPI has been very handy for small-scale businesses and payments to them, retail purchases, and people-to-people transactions. IMPS could be widely used for interbank transfers when the UPI option is not possible and the pay is higher.

Accessibility: Both UPI and IMPS are user-friendly transaction methods. Both strive to provide convenient, secure, and safer payments, and they're learning to keep their interfaces user-friendly.

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Conclusion

The world is developing daily and never ceases to surprise us with new things or discoveries. Similarly, payment options have also been updated, updating buildings to the needs and expectations of people. It has also prioritized ease and seamless transactions, which have become the base for its growth and widespread usage. Platforms like UPI and IMPS are still updating and changing as per people's preferences. Though there are a lot of differences among them, their ultimate goal at the end of the day is to make you enjoy seamless, secured and quicker transactions.

FAQs

Which one is better, IMPS or UPI?

It could be said which one is better depending upon the needs and requirements. , IMPS would be a great choice for a more significant amount of transactions, and smaller transactions involving day-to-day payments could prefer UPI as a suitable one. So, it is hard to tell which one is better when it comes to UPI vs. IMPS.

Is GPay IMPS?

The answer to the above question is no because GPay works entirely with UPI, which does not allow it to become IMPS transactions.

Does UPI work faster than IMPS?

When comparing both, UPI is faster than IMPS because it doesn't require us to fill out any details, and the transactions are always instant. In IMPS, the payments are real-time but not as instant as UPI. Also, it consumes time since it requires the beneficiary details to be filled out unless, like UPI, it doesn't ask for any details.

What is the major difference between IMPS and NEFT?

IMPS facilitates real-time transactions of huge amounts. In contrast, NEFT processes the payment with a minimum time of half an hour and is processed in batches. In this case, it would be effective to say that IMPS is for urgent and instant payment for big money and as for NEFT, it could be preferred for preplanned and bulk transfer payments.

What are the benefits of UPI and IMPS?

Both UPI and IMPS have benefits over the other. When you want to make a smaller payment, you can choose UPI as your payment partner, and for a higher amount, you can absolutely choose IMPS as the payment option. Both of them have similar kinds of benefits. They both work for seamless, safe and secure transactions, indicating the user-friendly and satisfactory services provided by them. It saves by making instant payments digitally, which is one of the major benefits of UPI and IMPS. Though they have their differences, they share the same kind of benefits.