IMPS: National Payment Corporation of India's real-time funds transfer mechanism changing lives

MUMBAI: Real-time funds transfer isn't a mystery any more for Mira Road-based Rampal (30) who transferred Rs 5,000 a few months ago to his family in UP in an emergency. This is no different for students in Punjab-based Lovely Professional University where all fees are received real time.
Welcome to the world of Immediate Payment Services, or IMPS, a real-time funds transfer mechanism, developed by National Payment Corporation of India.

Transaction volume has surged to 13 million a month from 3 million a year ago, while the value of transactions increased to Rs 10,550 crore in April '15 from Rs 2154 crore in March '14.

"Real-time payment is the future, be it for remittance or merchant payments," said AP Hota, Managing Director & CEO, National Payments Corporation of India. IMPS is a platform that meets the need. Our goal is to reach 100 million transactions by September 2016."

IMPS transactions can happen directly or indirectly, and you can do it using your bank's online or mobile applications. Also, one can go to any local agent or retail outlet of any pre-paid instrument companies such as GI Tech, Oxygen, ItzCash, Payworld and many others.

One of the advantages of IMPS over other online transaction facilities is that it is real time. Moreover, it has a wider reach because transactions can be conducted on mobile phones which have a wider reach and penetration than internet.

Past 12-18 months, NPCI has included 11 PPIs along 85 banks, which are part of the entire network. PPIs have formed about 40% of transaction values.

"No other fund transfer mechanism can match IMPS in terms of swiftness when it comes to remittance and merchant payments," said Ramu Ramasamy, managing director, GI Tech, which has applied for a payment banking licence. "We have altogether about 30% market share in IMPS transactions. Our average ticket size per transaction is about Rs 3,000."

"Mirgrant workers to vegetable sellers, all are using this real-time mode. Even urban people and students are also using it for their convenience to transfer funds."

Chennai-based onion sellers who buy them from Andhra mostly pay their suppliers using I Cash, an IMPS-enabled card offered by GI Tech.

Similarly, the company offers a scholar card, which has helped students pay fees at LPU in Punjab. LPU is perhaps the first-ever university, which is fully IMPS-enabled payment services.

Paying fees have never been this easy, no more long queues….one can pay fees real time in the campus. This can be recharged at any merchant stores in campus or at any I cash agents, said a student from the varsity.

As per RBI guidelines, domestic money remittance limit for minimum KYC user is Rs.5,000 each transaction with Rs.25,000 maximum in a month. For full KYC, the limit is Rs 49,999 each transaction with Rs 1,00,000 in a month. As these are done though IMPS, there’s a limit applied to it.

Many other PPIs are planning to tie up the NPCI with the rising popularity of IMPS. PPIs normally charge 1-1.50% for every transaction, which is way below than the informal channels.

"We are in the process of integrating with NPCI directly, given its increasing popularity," said Praveen Dhabhai, COO, Payworld. “As we have applied for a payment bank licence, NPCI association will help us expand more IMPS transaction with facilities like e-kYC."