If you need to send money quickly and securely, IMPS and UPI are two commonly used options. Each of them makes the transfer of funds convenient and quick- be it paying a bill, buying something online, or transferring money to someone. Both ensure a smooth process in the fastest of ways. But which is more suitable to your needs, and what is the difference between them?
In this article, we’ll cover the main differences between IMPS and UPI, explaining in detail how both can help achieve the facilitation of speedy payments. We'll explore factors like speed, security, charges, and general user experience so that you know what best fits your needs.
What is IMPS?
A payment can be transferred from one account to another immediately through IMPS - Immediate Payment Service. Up to Rs. 5 lakhs can be transferred instantly with the facility of mobile banking, Net Banking, or even through ATMs. This is a fast and secure medium created for those requiring urgent fund flow with no hassle, day or night.
What is UPI?
UPI or Unified Payments Interface is the platform launched by NPCI to make money transfers from any bank account into another effortless using mobile devices. It would be accessed like IMPS, round the clock for performing instant transactions. The UPI transaction limit, being set at ₹1 lakh, is not very bad for everyday purchases and smaller amounts. It makes straightforward peer-to-peer money transfers as simple as sending a text message and represents an advancement within the digital payment realm, making the experience of users more convenient.
The Difference Between IMPS and UPI
IMPS offers the facility of instant fund transfers between various bank accounts with the help of a Mobile Money Identifier and mobile numbers. On the contrary, however, UPI offers a more advanced solution, ensuring smooth and instant transfer of funds without using multiple banking applications, but through a single mobile application.
IMPS vs UPI
| Feature | IMPS | UPI |
| Ease of Transaction | Requires entering multiple details like name, bank account, and IFSC code. | Payments are made directly from your bank account, without needing card details or net banking info. |
| Payment Address | Needs details like “Shree Rana at XYZ bank, XYZ branch with IFSC code XYZ09865”. | Can complete with just a simple address like “shreerana@xxxbank”. |
| Platform Availability | Requires a specific app for each bank. | Allows linking multiple bank accounts in a single app, making account management easier. |
| Transaction Limit | Up to ₹5 lakhs per day. | Limited to ₹1 lakh per day. |
| Authentication Details | Relies on OTP for verifying transactions. | Uses a secure MPIN for authentication, adding an extra layer of security. |
| Money Collection | Only supports transfers to registered beneficiaries. | Allows users to request money, making financial transactions more flexible. |
| Beneficiary Addition | Requires adding beneficiary details like name, account number, and IFSC code, with a 30-minute wait. | Only the Virtual Payment Address (VPA) of the recipient is needed, simplifying the process. |
| Money Transfer Abroad | Supports international money transfers. | Currently limited to transactions within India only. |
| Charges | Charges range from ₹3.50 to ₹15 + GST, based on the amount transferred. | No transaction fees for UPI payments as of now. |
UPI vs IMPS: Which One is Better for You?
When picking a payment method, it comes down to what's easiest, safest, and most affordable for you.
IMPS and UPI are both popular in India, but how do they compare?
IMPS is a bit simpler as it skips the two-factor authentication that UPI requires. But UPI has its perks too- it lets you pay using a Virtual Payment Address (VPA) instead of sharing your bank details, which feels more secure.
Through UPI, one can send money to several people at the same time, and it works with lots of different banks. Some apps offering UPI even provide rewards and cashback so using it would not cost you anything. While some banks might charge for IMPS transfers, UPI is often free and more widely used now.
At the end of the day, it’s all about what works best for you- whether you value simplicity, security, or saving a little extra.
FAQs
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Which is more cost-effective?
UPI is generally more cost-effective, as it doesn’t charge transaction fees, while IMPS fees vary based on the transaction amount.
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Does UPI run on IMPS?
No, UPI and IMPS are separate systems. IMPS is an older system that uses account details for transfers, while UPI is built for faster, app-based transactions.
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Which offers better security?
UPI is considered more secure due to its use of MPIN for authentication, while IMPS relies on OTP, which can sometimes be less secure.
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Why is UPI better for daily transactions?
UPI allows instant money transfers without needing to add beneficiaries or wait for approval, making it faster and easier for everyday use.
