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Transactions via the Immediate Payment Service (IMPS) platform are growing at a fast pace, both in value and volume, reports Pranay Lakshminarasimhan in Mumbai. The number of transactions has risen nearly tenfold to 3.11 crore in April 2016, from 32 lakh in April 2014, data on National Payments Corporation of India’s website revealed. The aggregate value of transactions in April was Rs 23,460 crore.

With National Payments Corporation of India (NPCI) set to use the IMPS platform for the Unified Payment Interface (UPI), the number of transactions is expected to increase multifold.

Currently, individuals too transfer money from one bank to another primarily via NEFT (National Electronic Funds Transfer). However, once UPI becomes popular, IMPS will also be the more common mode of transacting.

IMPS is gaining in popularity because customers can transfer funds to another account instantly. Moreover, unlike the NEFT and and Real-Time Gross Settlement (RTGS), which operate between 9 am and 4.30 pm (6.30 pm for transactions within the same bank), the IMPS platform is available 24×7. Further, unlike NEFT and RTGS, IMPS is not confined to only bank accounts and is used by e-wallets and payment platforms as well.

Both NEFT and RTGS are primarily used for higher value transactions. With the advent of the UPI, this trend is likely to solidify further, particularly because of the convenience offered by the IMPS platform.

“The penetration of IMPS in India is still very low. The UPI is not available to the public as yet and even after it goes live, it will take some time for it to stabilise and spread. But it is very likely that after UPI stabilises and gets a good foothold in the market, there will be a noticeable shift to IMPS from NEFT as the major source of funds transfers originating from individual customers,” Dilip Asbe, Chief Operating Officer at NPCI, told FE.

Despite a higher base, the NEFT platform has also witnessed significant growth in terms of the number of transactions and the value transacted. In April, a total of `8.32 lakh crore was transacted through 11.18 crore NEFT transactions. The amount was nearly twice the amount transacted in April 2014 and the number of transactions was around 60% higher than in the same months two years ago.

For Banks, a significant portion of NEFT transactions come from bulk payments made by companies, like salary payment at the end of each month, since there is an upper cap on the amount one can transact through IMPS in one day.

In terms of the amount transacted, the RTGS platform is responsible for most of the money being transferred electronically in the country. The platform is primarily used by companies and individuals looking to transfer large sums of money. Although the there is no official maximum limit for RTGS, some banks have imposed an upper limit for individual accounts.

According to data published by the Reserve Bank of India (RBI), Rs 76.33 lakh crore was transacted using RTGS in April this year through 87 lakh transactions. The number of transactions was 12% higher than in April 2014 and the amount transacted grew by nearly 31% over the same period.