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Mutual Funds

IMPS Volumes Go Up 5x In A Year, We Think This Will Be Huge

We’ve written about IMPS – India’s Instant Payment Service – in the past. In 2011, I made an “instant” payment to my friend Shyam. I hit send on my machine and it was on his netbanking immediately – and this is between two different banks!

IMPS has changed substantially. First, more banks offer it now. There are 84 banks that offer it, versus a handful in 2011.

Second, the concept has expanded. From the basic structure of using a “Mobile Identifier” or MMID, which you had to get from your bank, you can now use IMPS to transfer to any other bank account, using the IFSC Code and Account number.

This is brilliant. I’ve been paying my household help using this concept. The money is transferred instantly, so they can see the money in the account immediately – if they are at an ATM, they can get the balance right there and then.

Third, they even map accounts using the Aadhaar number. So you can pay someone by just mentioning their Aadhaar number, if they have linked it to a bank account. This is beyond powerful – it can change the entire ecosystem of small payments.

Fourth, merchants can even “request” payments now. Many banks (Yes bank is one of them) allow you to generate a One Time Password on your phone, and you can place that with a merchant who can use it to charge the exact amount. I have actually used this to make an LIC payment (LIC supports this concept). Why are merchant payments different? They need a lot more information that you will otherwise get in an IMPS transaction, which a single “reference” field is useless for).

And finally, you can use IMPS on any phone – no smartphone required. Just dial *99# and you can use the return instructions to make transfers. (See participating banks and telcos)

The Cost Is Attractive

What does IMPS cost? To the bank, it’s a mere Rs. 0.25 per transaction charged by NPCI. Many banks simply absorb the cost (it probably costs them more to charge you for it!).

It’s been growing!

IMPS has grown substantially, with transaction amounts going up 5x in the last year, to about 10,000 cr. per month.


This is quite an interesting field. IMPS will be absolutely HUGE going forward. We are looking forward to great implementations, such as:

  • Instant payment of auto/taxi fares through apps – since the amount isn’t known, they can use OTP based payments
  • Investing in Mutual funds as “SIP” but with varying amounts, with IMPS based quick payments
  • Paying merchants in shops by just connecting through your phone – with, of course, appropriate protection and two-factor auth
  • Quick transfer of money from one place to another; intra-country remittances can be instant
  • With ultra low costs, the IMPS system can be used for even micro-lending and on-the-spot lending

This will easily replace wallets, if banks got their act together. Soon, it seems, we will have a Unified payment system architecture where anyone (including non-banks) can integrate into this awesome network. It’s way better than anything else out there – it’s instant, it’s safe, and it’s reliable.

What are your experiences with it?

  • Kunal Damle says:

    Absolutely love this, living outside of India makes payments that much easier. Do not know of any other way I would make payments from.

  • Anshul says:

    Indeed. Number of micro payments transfers & merchant payments are exploding. Many start-ups have entered the field of m-wallets & developing nifty POS machines which can run when connected through mobile phone.
    Do you think such start-ups will have a tough time when all banks start putting their weight behind IMPS ? I feel enabling merchant payments can be a game changer.

  • Rajnish says:

    Using it since day 1..i don’t use banks which don’t provide good imps interface..
    I have many grudges against these banks who defeat the purpose of imps..
    Sbi won’t even allow imps after 8pm.. And they want you add the beneficiary first.. Same with axis(adding the beneficiary part) no better..
    Only bank who has really used this well is icici..(of the one i am using)

  • shivambose says:

    SBI Charges Rs 10 per IMPS transaction, while ICICI doesn’t charge anything

  • Ashish says:

    HDFC and AXIS bank seem to be charging INR 5 + taxes for IMPS transfers, while NEFT is free (at least for me). It’s not as cheap for the consumer yet.
    IMPS experience is awesome though.
    What is this OTP option you are talking about? Any links? Sounds super cool for biggish transactions such as hotel/car/homestay bookings/advances in the un-organised travel sector…

    • OTP thingy: I don’t think you can do bookings much in advance as the OTP expires, I think. Here’s teh detail:
      It’s called an IMPS Merchant “pull” transaction.

    • piyush says:

      I always thought IMPS was to be used for mobile based transfers, till i discovered 2-3 months ago that I could use it with IFSC code. After that I use only IMPS. HDFC charges 5+tax, but I still use this. Actually I didnt even know that it doesnt charge for NEFT but does for IMPS. I really don’t care. I don’t make large number transactions in the first place so not bothered.

  • Robert says:

    IMPS is the awesome !
    With Paytm’s trashful “terms” like 4% tax and expiry of any balance in 6 months being unacceptable for majority of population the paytm wallet is gonna be a wallet for Paytm and not for the mango man. Maybe the thinning of wallets after 6 months can be attributed to the crores spent on IPL advertisement.
    IMPS is the best thing because
    1. Money remains as currency in bank account, earning interest.
    2. Money is available for expenses 24 X 7
    3. Trasfer is almost instantaneous
    4. Seamless and simple
    My exp with Yes Bank has been awesome. Many banks integrate IMPS with smartphone apps making it even more convenient and safe. With IMPS interfaced in mobile apps I was able to use IMPS for making transfer using wifi without Indian Sim in a foreign country for instantaneous transactions between Indian accounts. I could have used NEFT but IMPS is even more convenient and more secure.
    And also Paytm Wallet Thumbs down. I only wish Paytm redeployed marketing money to poor people’s account using their own Paytm infrastructure.

    • piyush says:

      Sorry what. If I have any leftover balance in my Paytm account it will get taken away if not used for 6months? I had loaded some i one for use with Uber and haven’t withdrawn or used for a few months. Crazy mucks. They should point that out somewhere.

      • Robert says:

        Well they won’t put it in ads for sure
        Terms & Conditions of Paytm read
        Redemption and Forfeiture
        Any value in Your Paytm Wallet must be utilized:
        Within 6 months from the date of your last Transaction or
        Within 6 months from the date of activation; whichever is later.
        Blah Blah ..
        forfeited amount will be recognized as income in books of account.
        They will take it as “income” in the “books”. –>> Paytm karo

  • Mani says:

    How can I receive payments using imps from ecommerce website (preferably merchant pull transaction)? As mentioned in the link (, once I received all the necessary details from customer, how can I send it to bank or NFS for transfer?. Would be good and helpful, if you could cover it in a separate blog with the topics 1) how to register as IMPS merchants with banks 2) How merchants can initiate transaction from their end (website, ivr, mobile app)? 3) Any limits in imps transaction on merchant pull transaction 4) What all are the charges charged by banks for merchants? 5) Does banks waive the imps charges for merchants (based on volume and others)?

  • Nagendra says:

    Well all bank do not follow the same process ..This is for HDFC
    Dial *99#
    Enter IFSC as HDFC
    Select option – Fund Transfer- Account no
    Enter IFSC and Account number of Beneficiary
    Enter MPIN and Last 4 Digits of your account number
    Enter Amount, Remarks and Confirm.
    You will receive the confirmation sms for IMPS transaction.
    Generate MPIN by calling on PhoneBanking numbers MPIN will be sent to your Mobile number on next working day
    Boy .. “next working day ? ” not sure why it should be the next working day ?

  • Santanu De says:

    For several months now, I have been using this method to pay all our domestic helps. In fact, this was a passive way for us to encourage one of our helps to open a zero balance bank account for the first time under the Jan Dhan scheme, and now we have insured him taking advantage of the Prime minister’s social security schemes. Additionally we are also buying some of our needs like fish from the non-supermarket sellers using instant payment. For the last six months, on an average, we have withdrawn less than INR 5000 per month in cash from banks