Understanding the Difference Between UPI and IMPS
Understanding the Difference Between UPI and IMPS
UPI provides a versatile, mobile-first experience ideal for everyday transactions, IMPS is better suited for secure inter-account bank transfers with higher limits. Understanding these differences helps users choose the right method based on their needs.
In India, UPI (Unified Payments Interface) and IMPS (Immediate Payment Service) are two popular digital payment systems that offer real-time money transfers. While both serve the same broad purpose, they differ in functionality, usage, and transaction limits.
1. Mode of Operation:
• UPI: Mobile-first system, allowing transfers using UPI IDs, phone numbers, or QR codes. It is highly integrated with third-party apps like Google Pay, PhonePe, and Paytm.
• IMPS: Primarily designed for inter-bank transfers via account details such as account number and IFSC code. Mobile Money Identifier (MMID) can also be used for transfers via mobile.
2. Ease of Use:
• UPI: Simple and user-friendly, does not require detailed bank information. The recipient’s UPI ID or phone number is sufficient for making a transfer.
• IMPS: Requires detailed bank information, such as the recipient’s account number and IFSC code, making the process more formal and slightly slower.
3. Interoperability:
• UPI: Works seamlessly across banks and platforms, allowing interoperability without needing specific bank details.
• IMPS: Transfers are limited to specific bank accounts, making it less flexible than UPI.
4. Transaction Limits:
• UPI: Typically has a daily transaction limit of ₹1 lakh, though this can vary by bank.
• IMPS: Higher transaction limits ranging from ₹2 lakhs to ₹5 lakhs, depending on the bank.
5. Transaction Costs:
• UPI: Mostly free or incurs minimal charges for merchants.
• IMPS: May come with small fees, depending on the bank and the transfer amount.
6. Use Cases:
• UPI: Ideal for small-scale payments, retail purchases, and peer-to-peer transfers due to its speed and ease.
• IMPS: Typically used for larger, inter-bank transfers where UPI may not be available.
