IMPS and UPI are online fund transfer methods just like NEFT and RTGS. But these are faster and better than NEFT in many ways.
IMPS- Immediate Payment Service:
Quick payment service or Interbank Mobile Payment Assistance is less popular than NEFT and RTGS. But, with an increase in mobile phone usage, transactions using this service is supposed to be immense in the following years.
Users can transfer funds to any bank accounts through their mobiles phones which have the internet connection. It is a 24*7 service. You may use it anytime throughout the year. National Payments Corporation of India is the creator of IMPS in the year 2010.
If you have the net banking and already using NEFT, you do not have to register again for IMPS. Once you begin the transaction, you get different options such as NEFT, RTGS, and IMPS. Just click on IMPS. You need the recipient’s account number and the IFSC code of his bank branch. If you are doing the mobile transfer, you need beneficiary’s account number and the MMID (Mobile Money Identifier) code. In the case of IMPS by mobile, You need not register the receiver.
The charges of IMPS:
Banks decide the service fees. As per RBI guidelines, ₹ 5 for transaction up to ₹ 1 lakh & ₹ 15 for ₹ up to 2 lakh. A service tax is also there.
The Advantages of IMPS:
You can send money fast. Money gets credited in Beneficiary’s account instantaneously.
IMPS is safer, secure and cost efficient.
No minimum quantity limit on fund transfer. You can even transfer ₹ 1.
IMPS is available 24*7 and on bank holidays too.
You can make within the bank as well as between two bank payments without any hassle.
It is available on a mobile phone, internet banking sites, and ATMs.
Knowing receiver’s Account number or IFSC is not required in IMPS. Fund transfer is possible using MMID, Aadhaar and mobile number only.
You get the Debit & Credit Confirmation by SMS or email.
The limitations of IMPS:
The transfer limit is ₹ 2 lakh through online banking.
Unified Payments Interface UPI:
UPI is app based money transfer technique, and apps permit transactions through the smartphone using Virtual Payment Address (VPA). It reduces the steps in the transaction, and hence, aid people to do transactions in small time. Download App.
The transfer occurs on a real time basis. The best point about UPI is that it does not need sharing of personal details such as account or credit/debit card number. UPI-enabled apps support transfers up to ₹ 1 lakh.
Steps in UPI usage:
Download the UPI app or update your bank app and make it UPI enabled.
Log in using your bank details.
Devise a virtual payment address (VPA) just like email.
To formulate the virtual id, go to the ‘UPI’ title, click on ‘manage’ tab and then choose ‘create virtual payment address.’
After registering your account number, choose ‘create new VPA’ option & type in the wanted virtual id address (e.g., abc@bank) and click on the ‘submit.’
You are ready for the transaction.
Sending Money through UPI App:
Log-in to UPI app.
Tap on ‘pay to virtual payment address’; make certain that you have the receiver’s virtual id.
Enter the virtual ID of the receiver, the amount, and the account number of yours.
After the verification screen arrives, analyze the payment details once again and select ‘submit’ to make the payment.
The bank charges for UPI:
It is free of cost in case a person transfers money using UPI to someone else using UPI. If one pays to a dealer, ₹ 15 is the charge, which is payable by the merchant. But this, too, has been waived off after demonetization.
The Limitations of UPI usage:
The transaction cap is ₹ 1 lakh. Some banks may levy supplementary per-day limits based on other transactions conducted via the banking app.
UPI is more Reliable than IMPS & NEFT. Why???
The UPI is changing the way we pay money. It has the power to take over other card payment, NEFT, IMPS, etc. The logic is understandable; it is a more practical and better means of payments. This system gains scores over the existing system of payments.
It is Cheapest; it is as cheap that you can transfer ₹ five without considering the cost. The fees for fund transfer through the UPI is <<< 50 paise.
Smooth and Easy Steps. We favor cash for a small transaction because card payments need lengthy details and various stages. For example, for online payment through the card, you have to give the card number, expiry date & CVV followed by the OTP.
Faster than others.It transfers money immediately. It works 24*7. There is no limitation. The NEFT sometimes take up to 24 hours for the fund transfer. UPI is as fast as IMPS.
Stress-free, no bank detail required. Most of us hate card payments because it asks for the bank account and other details. For card payment, you need to give card number, expiry date, and CVV number. But the UPI resolves this issue. The payment through app does not need the card details. You have to carry the virtual payment address only.
One app can have many accounts: One App serves for all bank accounts. So you do not need separate UPI app for another bank account.
Money Accumulation Facility. It may claims payment from the third party on account of you. For example, If Rahul has borrowed money from you & you want it back. Use the money collecting facility of UPI. Rahul would get a notification. If he accepts this information, you will get the money quickly.
UPI vs Digital Wallets: Digital wallet has made the online payments easy. Like as mobile recharge, different tickets, e-shopping, etc. has become very smooth because of these wallets. Snapdeal, Paytm, Freecharge and IRCTC, Everyone wants you to keep the digital wallet. So it becomes a hassle to keep more than one wallet. The UPI would end this trouble. The payment by the UPI is as easy as payment by the wallets. Moreover, a single app is enough to pay everywhere. Also, it does not charge money in advance. Rather, your money stays in the bank account and keeps getting the interest. Digital wallets don’t give this perk.