Transactions made through the Immediate Payment Service (IMPS) between April and August grew more than 126% year-on-year to Rs 1.28 lakh crore, highlighting the platform’s success in emerging as one of the preferred choices for money transfer in India. At 168.6 million, transactions during the April-August period was twice the number seen in the year-ago period. The number of transactions in August alone grew 137.7 % from a year ago.
The numbers do not include transactions through newly-launched Unified Payment Interface (UPI), which is also based on the IMPS platform. UPI allows account holders across banks to send and receive money on their smartphones without entering bank account details. The UPI user base was around 2.25 lakh as of September.
Currently, the UPI platform includes Axis Bank, Andhra Bank, YES Bank and ICICI Bank. In its second phase, the platform will include other banks such as SBI and HDFC Bank. HDFC Bank may join the platform by October end, sources said. While the National Electronic Funds Transfer (NEFT) settles transactions in a scheduled time slot, money is transferred instantly via IMPS, which seems to be making it increasingly popular, a preferred option over the NEFT for smaller-value transactions.
Unlike the NEFT and and real-time gross settlement (RTGS), which operates
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 the NEFT and the RTGS, IMPS is not confined to only bank accounts and is used by e-wallets and payment platforms as well. As of now, customer can transact on IMPS subject to a daily cap of Rs 2 lakh.
According to a report published by the BCG and Google, more than 50% of India’s internet users will use digital payments by 2020. Top 100 million users will drive 70% digital payments with convenience emerging as the most important factor driving this growth.
The report also projects that by 2020, the size of digital payments industry in India will be $500 billion; contributing 15% to the country’s GDP.