Choose the Best Payment Mode to Grow your Business
Did you know that the Asia Pacific region is one of the strongest growing markets worldwide? Expert prediction of the compound annual growth rate of 35.2% justifies this fact. Interestingly, nations like India and China are pioneering market growth via online payment modes. Of the numerous payment modes available in India, it is important to know the UPI-IMPS difference.
In a fast-paced world, the payment ecosystem is constantly evolving based on the consumer’s needs and behaviour. Be it e-commerce, retail, or startup sector, customers prefer faster purchases and instant payment settlement. Hence, to cater to these needs, digital payment modes have grown by leaps and bounds in India. In addition to banking cards and prepaid cards, UPI and IMPS are the sought-after media for instant payments in India.
UPI (Unified Payments Interface), developed by NPCI is a popular instant payment settlement system regulated by RBI. On the other hand, IMPS (Immediate Payment Service) brings in interbank electronics transfers in an instant manner. Though, performing similar functions, UPI and IMPS differ in terms of transfer time, card details, security, etc.
In this blog, let us learn the basic differences between UPI and IMPS.
1. UPI-IMPS Difference 1: Ease of transaction
For making an IMPS transaction, you need to enter lengthy and complex data ranging from Name, Bank Account, IFSC code, etc. This creates inconvenience to a user. On the other hand, the UPI transaction is a simple process of solely inserting the Virtual payment address (VPA) of the payee.
2. UPI-IMPS Difference 2: App compatibility
To make an IMPS transfer, one needs to have the particular app of the debiting account. On the other hand, UPI gives a flexible option of linking with multiple bank accounts from the same app. This reduces space issues upon downloading apps of different banks, in case of having multiple bank accounts.
3. UPI-IMPS Difference 3: Security
As compared to IMPS, UPI gives a secured medium of payment transfer. It is due to the fact that, unlike IMPS, minimal details are entered while making a transaction. But, in the case of IMPS, bank account details are entered, which is perilous on an unsecured network.
4. UPI-IMPS Difference 4: Transfer time
Though IMPS comes with the instant money transfer option, it is lengthier as compared to UPI. Money transfer happens after a new payee registration and a wait time of thirty minutes to make the money transfer to the new payee.
In comparison, UPI payment is done to a new payee without any payee registration or wait time.
5. UPI-IMPS Difference 5: Money Collector
UPI provides the unique option of requesting money collection. You can send the request money message to people who owe you money. This brings in financial credibility in the long run.
On the contrary, IMPS does not provide the option of requesting money. There is a sole option of money transfer to the registered payees.
6. UPI-IMPS Difference 6: Money transfer abroad
Using the IMPS method, you can transfer money abroad. But, at present, UPI does not have the option of transferring money abroad. UPI transactions are limited to within India, at present.
7. UPI-IMPS Difference 7: Need for smartphone
IMPS transactions require a smartphone along with the relevant app to make payment transfers. UPI followed a similar feature previously. But now, UPI transactions are available in USSD-enabled mobiles. This flexibility allows you to access your money irrespective of smartphone availability.
8. UPI-IMPS Difference 8: Bank account
In the case of IMPS, it is mandatory to have a bank account to send or receive money. It is a bank-to-bank transfer using IFSC code + Account number or MMID.
However, in the case of UPI, you can receive money even if you do not possess a bank account. You just need to install a payment app to receive money in your wallet.
9. UPI-IMPS Difference 9: Authentication details
UPI payment authentication takes the form of an MPIN number. MPIN is a 4 or 6-digit user-determined number to authorize a payment.
On the other hand, IMPS transactions happen with an OTP (one-time-password) authentication. Once you confirm and authorize the payment, an OTP is sent to your mobile phone.
10. UPI-IMPS Difference 10: Beneficiary addition
IMPS comes with a lengthy beneficiary addition process. The details like payee name, payee bank account, IFSC code of payee bank, etc are mandatory before making the payment 30 minutes later.
On the other hand, UPI payment solely requires the use of the VPA(virtual payment address) of the payee to initiate the payment.
11. UPI-IMPS Difference 11: E-commerce transaction
Both UPI and IMPS support e-commerce transactions. One can make B2B or B2C transactions using either UPI or IMPS.
12. UPI-IMPS Difference 12: Transaction charges
At present, both IMPS and UPI are chargeable beyond a certain limit ( generally above Rs.1000). For IMPS, there are different charges on a bank-to-bank basis. However, for UPI, RBI indicates the transaction charge to fall between Rs.0.50 to Rs. 1.00.
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YOU ARE READING THE ARTICLE COURTESY: SabPaisa (SRS Live Technologies) – headquartered in New Delhi with eight regional offices including Mumbai, Bangalore & Kolkata – is a rapidly growing fintech company that has developed one of India’s most advanced AI-driven recurring payments platforms bolstered by another of SabPaisa’s unique products: world’s first hybrid payment platform which has all the payment modes in a single checkout page, online and offline, from UPI to Cards to e-NEFT to e-Cash. Businesses that take SabPaisa’s payment gateway get real-time reconciliation and consolidated reports for all payments, recurring or one-time, online or offline, in a single dashboard, whether the payer is an 18-year-old in Kashmir paying through UPI or a 70-year paying through Cash in Kanyakumari. SabPaisa’s payments and collection application suite have already processed more than INR 12 Billion to date. Learn more about SabPaisa here:https://sabpaisa.in
