Immediate Payment Service
The Immediate Payment Service (IMPS) is an instant inter-bank electronic funds transfer system in India that enables real-time, 24/7 money transfers between bank accounts using mobile numbers, MMIDs (Mobile Money Identifier), account numbers, or IFSCs (Indian Financial System Code).[1] Developed and operated by the National Payments Corporation of India (NPCI), IMPS facilitates secure, channel-agnostic transactions via mobile banking apps, internet banking, SMS, IVR (Interactive Voice Response), or ATMs, with immediate confirmation to both sender and receiver.[1] Launched on November 22, 2010, by NPCI under the oversight of the Reserve Bank of India (RBI), it was initially piloted with a few banks before nationwide rollout, marking India's first 24x7 retail payment system and laying the groundwork for later innovations like the Unified Payments Interface (UPI).[2][3] IMPS supports both person-to-person (P2P) and person-to-merchant (P2M) transfers, with a per-transaction limit of ₹5 lakh across most channels (except SMS and IVR, which have lower caps), and daily limits set by individual banks or the RBI.[1][4] Transactions are processed using NPCI's centralized infrastructure and the ISO 20022-based FIBOS messaging protocol, ensuring settlement in real-time through the sponsor bank's settlement account with the RBI.[5] Security features include two-factor authentication via OTP (One-Time Password), end-to-end encryption, and transaction alerts via SMS, making it suitable for urgent needs like medical emergencies, travel bookings, or bill payments even on weekends and holidays.[1][6] As of October 2025, over 950 banks and prepaid payment instrument issuers participate in IMPS, contributing to its growth from modest volumes at launch to over 4 billion transactions annually, enhancing financial inclusion by enabling access without traditional banking hours or physical branches.[7] While charges vary by bank (typically ₹2.50 to ₹15 plus GST per transaction), many institutions offer free transfers for certain amounts or accounts, promoting widespread adoption in India's digital payments ecosystem.[5] IMPS remains a cornerstone of NPCI's retail payment suite, interoperable with services like UPI, and continues to evolve with features such as Aadhaar-based transfers.[1]Overview
Definition and Objectives
The Immediate Payment Service (IMPS) is a 24/7 real-time inter-bank electronic funds transfer system developed and operated by the National Payments Corporation of India (NPCI), enabling instant transfers between bank accounts and RBI-authorized Prepaid Payment Instrument issuers across the country.[8] It facilitates seamless, round-the-clock money movement, including on holidays, through various channels without the constraints of traditional banking hours.[8] The primary objectives of IMPS include enabling instant person-to-person (P2P) and person-to-merchant (P2M) transfers to promote financial inclusion by providing accessible digital payment options, particularly for underserved populations, while reducing dependency on cash transactions and fostering growth in the digital economy.[9] By offering safe, secure, and cost-effective services, IMPS aims to empower users with convenient fund transfers, supporting broader initiatives for a less-cash society.[8] IMPS emerged to address the limitations of earlier batch-processed systems like the National Electronic Funds Transfer (NEFT), which operates in hourly settlements, and the Real Time Gross Settlement (RTGS), which, despite being real-time, is restricted to specific operating hours and minimum transaction amounts.[9] This always-on accessibility ensures immediate fund availability, overcoming delays such as 24-hour payee registration requirements in legacy systems.[9] A unique aspect of IMPS is its ability to initiate transactions using mobile numbers paired with a Mobile Money Identifier (MMID), account numbers with IFSC codes, or Aadhaar numbers, without requiring internet connectivity for all methods, such as USSD-based or branch-initiated transfers.[9] As part of the broader NPCI ecosystem, IMPS serves as foundational infrastructure for services like the Unified Payments Interface (UPI).[10]Availability and Coverage
The Immediate Payment Service (IMPS) is accessible 24/7 across all states and union territories in India, with no geographic restrictions for users within the country.[1] This nationwide coverage ensures that eligible customers of participating institutions can initiate and receive instant transfers at any time, including weekends and public holidays.[1] As of 2025, the IMPS ecosystem comprises over 900 participating members, including public sector banks, private banks, cooperative banks, regional rural banks, and prepaid payment instrument issuers.[11] Prominent examples include the State Bank of India (SBI), HDFC Bank, and ICICI Bank, which represent a mix of public and private sector institutions enabling broad institutional participation.[4] IMPS is available through multiple user access points, including mobile banking applications, internet banking portals, automated teller machines (ATMs), short message service (SMS) banking, and interactive voice response (IVR) systems.[1] These options make the service inclusive, as basic transactions via SMS or IVR do not require a smartphone, allowing accessibility for users with feature phones.[12] While primarily designed for domestic transactions, IMPS supports limited international aspects through foreign inward remittance (FIR) services, where non-resident Indians can route funds via exchange houses or money transfer operators for the final domestic leg in India.[13] As of 2025, no full-scale cross-border outbound pilots have been implemented.[1]Historical Development
Inception and Launch
The Immediate Payment Service (IMPS) was conceptualized in 2009 by the National Payments Corporation of India (NPCI), established under the guidance of the Reserve Bank of India (RBI), as a mobile-based instant payment alternative to existing systems like NEFT and RTGS, which were limited to banking hours and lacked round-the-clock availability.[14] NPCI, formed as a not-for-profit entity in December 2008 and commencing operations in early 2010, aimed to consolidate retail payment infrastructure and promote financial inclusion through interoperable, real-time interbank transfers.[15] This development leveraged NPCI's acquisition of the National Financial Switch (NFS) in November 2009, providing a foundational network for ATM and card-based transactions that extended to mobile channels.[14] Following conceptualization, NPCI initiated a beta testing phase in August 2010, conducting a pilot study on the mobile payment system in collaboration with select major banks, including State Bank of India (SBI), ICICI Bank, Bank of India (BOI), and Union Bank of India (UBI).[14] The pilot focused on validating the interoperability of instant fund transfers using mobile identifiers and SMS-based initiation, ensuring seamless person-to-person remittances across participating institutions without requiring traditional account details.[16] This testing phase addressed technical feasibility and user experience, paving the way for broader rollout while adhering to RBI's regulatory framework under the Payment and Settlement Systems Act, 2007.[14] IMPS was officially launched to the public on November 22, 2010, in Mumbai by RBI Deputy Governor Shyamala Gopinath, marking the introduction of India's first 24/7 instant interbank electronic funds transfer service.[17][18] The initial rollout emphasized mobile and ATM channels, enabling customers to transfer up to ₹50,000 per transaction using a seven-digit Mobile Money Identifier (MMID) and sender's mobile number, with seven banks participating at launch, including SBI and ICICI.[17] Gopinath highlighted its role in enhancing retail payment efficiency and accessibility during the inauguration event organized by NPCI.[18] In its first year, IMPS encountered early challenges, including limited bank participation—restricted initially to a handful of institutions—and low public awareness, which slowed adoption despite its innovative features.[19] Users faced hurdles with the cumbersome MMID registration process and security apprehensions regarding mobile transactions, contributing to modest transaction volumes in 2010-2011.[19] These issues underscored the need for simplification and broader outreach to realize IMPS's potential for financial inclusion.[19]Expansion and Milestones
Following its initial launch, the Immediate Payment Service (IMPS) experienced rapid early growth through expanded channel integrations and network participation. In 2011, IMPS integrated with internet banking platforms, enabling users to initiate transfers via online banking interfaces alongside existing mobile and ATM options, which broadened accessibility beyond SMS-based transactions.[19] By 2013, the network had grown to include 59 participating banks, facilitating wider interbank connectivity and laying the foundation for nationwide adoption.[20] Key milestones marked IMPS's evolution into a more versatile system. The introduction of Aadhaar-based transfers in 2013 allowed remittances using the unique Aadhaar identifier as a financial address, enhancing financial inclusion for underserved populations by simplifying beneficiary identification without requiring traditional account details. However, Aadhaar-based transfers were discontinued in August 2018 following a Supreme Court ruling on Aadhaar privacy concerns.[21][22] By 2016, daily transaction volumes surpassed 1 million, driven by a 116% year-over-year increase in overall activity from October 2015 to October 2016, reflecting growing user trust and utility in real-time payments.[9] Support for QR code payments was added in 2017 through integration with BharatQR, enabling seamless merchant transactions by scanning interoperable codes without sharing sensitive details like mobile numbers or account information.[23] Recent enhancements focused on scalability and ecosystem integration. In October 2021, the Reserve Bank of India raised the per-transaction limit from ₹2 lakh to ₹5 lakh (previously increased from ₹1 lakh in earlier phases), accommodating higher-value transfers while maintaining security. API enhancements in 2023 improved interoperability for fintech applications, allowing third-party providers to embed IMPS functionalities more efficiently into apps and services for faster onboarding and transaction processing.[24] IMPS achieved a record 441 million transactions in December 2024, valued at ₹6.02 trillion, underscoring its role in India's digital payment surge.[25] Institutional expansions further strengthened IMPS's infrastructure. By 2017, payment banks such as Airtel Payments Bank fully participated, leveraging their extensive retail networks to offer IMPS-enabled transfers, which extended instant payment access to millions via non-traditional banking touchpoints.[26]Functionality
Transaction Initiation Methods
Transactions in the Immediate Payment Service (IMPS) can be initiated through multiple user-friendly channels, enabling instant fund transfers between bank accounts on a 24/7 basis.[1] These methods are designed to accommodate both digital-savvy users and those preferring non-digital options, with all requiring a linked bank account for authentication and execution.[19] Mobile BankingThe most common initiation method involves mobile banking applications provided by participating banks. Users register for the service to obtain a unique Mobile Money Identifier (MMID), a seven-digit code tied to their mobile number and bank account, and set up a Mobile Personal Identification Number (MPIN) for secure authentication.[1][19] To initiate a transfer, the sender enters the recipient's MMID and mobile number, the transfer amount, and confirms with their MPIN via the app, facilitating person-to-person (P2P) or person-to-account (P2A) transactions.[1] This method supports smartphone users and is widely adopted for its convenience and speed. Internet Banking
Through web-based portals of banks, users can initiate IMPS transfers using desktop or laptop browsers after logging in with their credentials.[1] The process requires the beneficiary's account number and Indian Financial System Code (IFSC), or alternatively the MMID if registered, along with the amount and a one-time password (OTP) or other authentication for verification.[19] This channel suits users without mobile access or those handling larger transactions via a secure online interface, ensuring account-to-account transfers without needing physical tokens. ATM and SMS
At automated teller machines (ATMs) of participating banks, users can initiate IMPS fund transfers by inserting their debit card, selecting the IMPS option, entering the recipient's MMID and amount, and authenticating with their debit card PIN.[1] For SMS-based initiation, users send a predefined text format (e.g., including MMID, amount, and MPIN) from their registered mobile number to a bank-specific short code, enabling basic transfers without internet or app access.[19] Both methods rely on prior mobile banking registration and linked accounts, providing accessibility for users in areas with limited digital infrastructure. Other Methods
Non-digital users can initiate IMPS transactions at bank branches by providing beneficiary details (such as account number, IFSC, or MMID) to a teller, who processes the request through the bank's system after verifying the sender's identity and account linkage.[19] Additionally, Interactive Voice Response (IVR) systems allow phone-based initiation by dialing a bank toll-free number, navigating menu options to enter transfer details, and authenticating with an MPIN, catering to those without smartphones or internet.[1] These branch and IVR options ensure inclusivity while maintaining the core requirement of a registered bank account.