What is the difference between UPI and IMPS? Know which one is better for transferring money

Both UPI and IMPS methods provide the facility of real-time money transfer but there is a difference between the two. Today, we will understand both these options of fund transfer in detail.

IMPS and UPI are very popular for online money transfer.

Difference between UPI and IMPS: Since the advent of digital payment system in the country, users have got a lot of convenience. Today there are many ways to make digital payments. Out of which IMPS (Immediate Payment Service) and UPI (Unified Payments Interface) are very popular. Through both these methods, we can do instant and secure money transfer. Although both methods provide the facility of real-time transfer, there is a difference between the two. Today, we will understand both these options of fund transfer in detail.

What is UPI and how does it work?

UPI or Unified Payments Interface allows users to link multiple bank accounts to a single mobile app and transfer funds instantly using Virtual Payment Address (VPA) or mobile number. Due to its ease of use, it has become the most popular way to transfer funds today.

What is IMPS and how does it work?

IMPS allows fund transfer from one bank to another in real time. To transfer funds through this, details of the bank account in which the money is to be transferred are required. IMPS can be done through bank app or net banking. IMPS service is available 24/7, with the help of which users can send money instantly across the country.

UPI VS IMPS: Know the difference between UPI and IMPS

Platform & interface

UPI works as a mobile-first system that allows users to transfer money using a UPI ID or phone number. It supports a variety of financial services, including bill payments, QR code transactions, and integration with third-party apps. In

contrast, IMPS is designed to transfer money between bank accounts using details such as account numbers and IFSC codes. Mobile numbers can also be used through MMID (Mobile Money Identifier). IMPS transactions can be done through bank apps or net banking.

User experience

UPI provides a much simpler and user-friendly experience, especially for peer-to-peer transactions. Users do not need to enter banking details to transfer money using this method, making the process faster and easier.

On the other hand, IMPS is more formal and requires complete account details like bank account number and IFSC code to transfer money through it.

Interoperability

UPI's strength is its interoperability. UPI IDs work across platforms and banks, which means the user does not need to know the recipient's bank account details. In contrast, IMPS requires specific bank account information to transfer money, which limits its interoperability compared to UPI.

Transaction limits

UPI generally has a daily transaction limit of Rs 1 lakh, although it may vary depending on the bank. IMPS, on the other hand, offers higher transaction limits, which generally range from Rs 2 lakh to Rs 5 lakh, depending on the bank.

Fees

UPI transactions are mostly free or merchants have to pay a minimal fee. In comparison, IMPS transactions may attract small fees, which may vary depending on the bank and the amount being transferred.

Ecosystem

UPI has a huge ecosystem that offers a variety of financial services by integrating with third-party apps such as Google Pay, PhonePe, and Paytm. IMPS, on the other hand, is primarily used through banking apps or net banking portals.

Adoption

UPI is widely used for small payments, retail purchases, and person-to-person transfers due to its convenience and flexibility. IMPS is often used for inter-bank transfers, especially in scenarios where UPI is not available.

In simple terms, UPI is more user-friendly for everyday transactions than IMPS.