Difference between IMPS Payment and UPI Payments

Summary

UPI and IMPS are two popular instant payment systems that facilitate quick and secure money transfers. For everyday mobile payments and QR transactions, UPI is better, while IMPS transfer services are better for direct bank-account transfers and larger transaction limits. 

Introduction 

The emergence of smartphones and accessible internet service made Indians adopt digital payments. Earlier, online banking was mostly limited to banking websites only. Today, you can pay through mobile banking, QR code, mobile number, or bank account number.

There are two types of money transfer methods that dominate the digital payment system: UPI and IMPS. These payment modes allow instant money transfers. Knowing IMPS vs. UPI helps you pick the best payment mode based on your needs.

What is IMPS? 

IMPS stands for Immediate Payment Service. It is an interbank fund transfer system launched by NPCI in 2010. Its primary aim was to allow instant transactions regardless of banking hours. Before the launch of IMPS, users had to use RTGS and NEFT for fund transfers, which were complicated.

Key Features of IMPS 

• Instant inter-banking transaction
• 24×7 availability
• Accessible through the internet and mobile banking
• Support for ATM banking and SMS Banking
• Use of OTP or MPIN for secure transactions
• The transaction limit is higher than that of UPI transactions

An IMPS transfer generally requires the IFSC code and the account number of the beneficiary to carry out the transfer.

Importance of IMPS Payment System 

The IMPS payment method remains popular despite the growth of UPI because many people still prefer to make transactions through accounts. For business professionals, it offers a better transaction limit, a higher level of security, and a more structured mode of transactions.

Reliability of IMPS System 

It allows instant transactions through regulated banking channels. Thus, in case of an emergency, people find the system more reliable due to its banking-level security.

An IMPS transaction means a secure and reliable transfer of money through bank accounts.

What is UPI? 

UPI stands for Unified Payments Interface. NPCI launched this system in 2016 to simplify digital money transactions. Unlike the IMPS system, UPI payments are more focused on mobile banking.

Using the mobile banking system, you can transfer funds using:

• UPI Ids
• Mobile Number
• QR Code

UPI Features

• Instant money transfer
• Use of QR Codes
• Mobile payment system
• Use of multiple linked accounts
• Bill Payments
• Merchant payment integration
• Ability to ask for payment requests

Today, the use of the UPI payment service has become a norm among customers and merchants.

Popularity of the UPI System 

UPI payments gained immense popularity due to their ability to provide a hassle-free banking experience. Users didn’t have to worry about memorizing the account number and IFSC code. Instead, all they had to do was simply scan the QR code.

Popular Apps Offering UPI and IMPS Facility

• Google Pay
• PhonePe
• Paytm
• BHIM

Use of UPI in Everyday Scenarios 

With the passage of time, the UPI system has evolved from a mere digital payment system to an all-purpose payment method. You can now pay through the UPI payment service for subscriptions, bills, investments, public transport, groceries, and even restaurant bills.

How to Make an IMPS Transfer? 

To know more about the IMPS transaction method, let us take you through the simple transaction process of IMPS.

• Log in to a mobile or internet banking facility.
• Add beneficiary details.
• Verify beneficiary account number and IFSC code.
• Enter the transfer amount.
• Verify the transaction with OTP or MPIN.
• NPCI completes the transaction instantly.
• Funds get credited to the beneficiary’s account immediately.

Although it may seem like more of a process compared to UPI, IMPS provides a better transfer facility.

IMPS Transfer Variants

• Person to Account Transfer: In this mode, the user must enter details of the beneficiary’s account.
• Person-to-Person Transfer: It includes transferring funds using a mobile number and an MMID identifier.
• Merchant Transfer: Many businesses accept IMPS-based settlement. 

Advantages of IMPS

• Suitable for making larger transfers
• Provides a banking-level of authentication
• Availability 365 days a year
• Immediate confirmation of transactions
• Multi-channels transaction

Because of all of these, many users prefer the IMPS system for professional money transfers.

How Does UPI Function? 

As compared to the IMPS system, UPI follows a more streamlined process:

• Open a UPI-enabled application.
• Select QR code or UPI ID.
• Enter payment amount.
• The user verifies the payment using a UPI PIN.
• The transfer gets executed instantly.

This reduced the need for lengthy banking details and made digital payments faster for ordinary users.

Why UPI Feels Easier

First of all, it was convenient for users to use.

Users no longer have to

• Enter the IFSC code manually
• Keep track of beneficiary accounts
• Enter the beneficiary’s account number manually

That is why UPI gained massive popularity.

IMPS vs. UPI Detailed Comparison 

The main difference between IMPS and UPI lies in their suitability according to the requirements.

Transaction Limits

One of the significant differences between the two systems includes transaction limits. IMPS transactions have an upper limit of ₹5 lakh. On average, the upper limit of a normal UPI transaction is ₹1 lakh. There might be some exceptional cases in which a UPI transaction might exceed ₹1 lakh.

Transaction Charges

UPI transactions are almost free. IMPS transactions attract minimal bank charges based on the following:

• Transfer Amount
• The type of bank used for transferring
• Bank Policies

For example, SBI Bank removed IMPS charges entirely from August 2025. Many banks have followed a similar path. Check your bank’s current schedule for applicable rates.

Ease of Use

The UPI system is much easier to use than IMPS payment.

The UPI system requires

• QR code
• UPI ID
• Mobile Number

The IMPS transfer system requires

• Account Number
• IFSC Code
• Beneficiary Setup in Many Cases

UPI is easier to use.

Transaction Speed

Both systems transfer money instantly. However, UPI seems faster than IMPS transactions, especially during peer-to-peer transfers.

IMPS remains equally reliable but slightly more structured.

Security

UPI transactions are secured by:

• UPI PIN Authentication
• Authentication of Mobile Device

While IMPS transactions are protected by:

• OTP Verification
• MPIN Verification
• Bank Account Validation

Both systems are considered safe when users follow proper payment practices.

Making the Right Choice: When to use IMPS and when to opt for UPI?

The answer depends on the transaction amount and type.

Use IMPS when:

• The transfer amount is large
• There is a need for direct bank transfers
• Business transactions have to be done
• Banking-oriented authentication is a requirement
• Internet banking transactions are common

Use UPI when:

• Quick transactions are essential
• Transaction through QR code becomes an option
• Merchant payments occur frequently
• Splitting of expenses occurs frequently
• Convenience is valued more than the size of transfers

In reality, most people use both systems for different needs.

Exploring a Smoother Transaction Experience with Modern Payment Solutions

The fast evolution of digital banking continues. Modern payment platforms place emphasis on making payments seem natural rather than technical. Modern payment ecosystems increasingly integrate features of UPI and IMPS to offer the following:

• Instant settlement
• Secured transfer of money
• Accessibility through mobile phones
• Immediate notification of transactions
• Simple authentication process

With the expansion of India’s digital economy, future payment systems are expected to become quicker and more integrated. The focus would be increasingly on enhancing security measures to combat fraud.

Conclusion

The comparative study of IMPS vs. UPI cannot conclude that one system is superior to the other in each case. Each system fulfills distinct payment requirements.

UPI revolutionized transactions by making payments quick, easy, and mobile. It became the preferred system for frequent payment, QR payments, and small amounts.

IMPS remained equally important for bank-to-bank transactions and larger value transactions.

Comprehension of IMPS vs. UPI will help users pick the payment method depending on the preference of convenience, size of transfer, transaction security, etc.

Key Highlights

• UPI simplified mobile payment transactions using QR and UPI ID.
• IMPS money transfer services facilitate safe inter-bank transfer transactions.
• Both payment systems provide instant transactions around the clock.
• UPI and IMPS are both RBI-regulated, secure payment systems