As India started the journey of financial inclusion, the need for the digitalization of banking services was also felt. You know that India is quickly becoming a global digital economy giant which is evident from the launch of digital payments services like IMPS and NEFT. Meant to cater to different customers, IMPS and NEFT have many differences between them.
To have a better knowledge of these fund transfer systems, we’ll go through the fundamental differences between IMPS and NEFT.
What is IMPS?
- What is IMPS?
- What is NEFT?
- Difference Between IMPS and NEFT
- Final Thoughts
- Frequently Asked Questions
Immediate payment service (IMPS) is an electronic fund transfer service used for interbank payments transactions. It’s a real-time fund transfer service that works across a variety of platforms, including mobile, internet, ATM, and SMS. We can also send money through Prepaid Payment Instrument (PPI) issuers using IMPS.
IMPS stands for Immediate Payments Service.) is developed by the National Payments Corporation of India (NPCI) and was publicly launched on 22nd November 2010.
Customers had no choice but to use NEFT and RTGS prior to the launch of IMPS because no other payment platforms were available during banking hours. This service allows users to send and receive money in real time and works even on holidays.
IMPS is a service that transfers funds to a beneficiary’s account instantaneously.
What is NEFT?
National Electronic Funds Transfer (NEFT) is a payment system that allows money to be transferred between banks and participating entities. The Reserve Bank of India owns and operates this service, which covers the entire country.
The money transfer requests in NEFT are settled on a half-hourly basis through the netting. Individuals can transfer money any time as this service is available 24×7. NEFT payments services are also available offline and can be used by individuals who do not have bank accounts.
The NEFT system’s only flaw is that it is not real-time. Money transfer from one bank account to another takes some time with this service.
Difference Between IMPS and NEFT
Despite the fact that both IMPS and NEFT were created to digitally update Indian banking transactions, they have significant variances.
The following are the key distinctions between IMPS and NEFT:
|Type of Settlement||One-one One Settlement||In Batches only|
|Min. Transfer Value||Rs. 1||Rs. 1|
|Max. Transfer Value||Rs. 2 Lakh||Depends on Customer Segment and Bank|
|Timings||24×7 (Sundays and holidays included)||24×7 (365 days a year)|
|Availability||24×7 (365 days)||24×7 (365 days)|
|Mode of Payment||Online Only||Online and Offline|
|Speed of Settlement||Immediate or Real-Time||Half hourly in Batches, not immediate|
The three most important factors to consider when deciding between NEFT and IMPS are the amount, speed, and timings. Both services, however, are available at all times. Before making payments through such platforms, you should understand the differences between IMPS and NEFT.
Frequently Asked Questions
What customer services are available under IMPS?
IMPS provides fund transfer and remittance services, such as sending and receiving money. In addition to the aforementioned features, the IMPS portal now offers the Query Service on Aadhaar Mapper (QSAM) service.
How can I transfer money using IMPS?
IMPS allows money to be transferred using mobile phones, bank apps and SMS, ATMs, and bank internet banking.
What are IMPS charges?
The cost of using IMPS is determined on the amount of money being transmitted. For fund transfers up to Rs. 2 lakh, the State Bank of India has waived IMPS charges.
Is IMPS a subsidiary of RBI?
No. IMPS is not a subsidiary of the RBI. With its current National Financial Switch (NFS) switch, NPCI launched it.
Which mode of payment between NEFT or IMPS is preferred for high-value fund transfers?
Because IMPS has a maximum limit of Rs. 2 lakh, the NEFT mechanism is recommended for high-value transactions.