WILL IMPS SURVIVE UPI?

AS UPI TAKES OVER DIGITAL PAYMENTS, WILL IMPS ADAPT OR BE ABANDONED? THE ANSWER ISN'T SIMPLE.

- NAVNEET DUBEY

WHEN THE SCORECARD reads 18 billion versus half a billion, the question that looms is whether banks should continue to support the Immediate Payment Service (IMPS) or abandon it in favour of the Unified Payments Interface (UPI). As UPI establishes itself as the leader in payments, its older sibling, IMPS, is seeing its share of India's digital payments pie shrink.

Back in 2010, when the National Payments Corporation of India (NPCI), an umbrella organisation promoted by the Reserve Bank of India and owned by a consortium of banks, launched IMPS, it electrified the banking sector, enabling instant bank transfers 24x7. IMPS was a significant advance over National Electronic Funds Transfer (NEFT) and Real-Time Gross Settlement (RTGS), which are processed in scheduled batches 30 minutes apart, initially only during office hours. Then, in 2016, NPCI launched UPI, which utilises a virtual payment address (VPA) built on the IMPS infrastructure and does not require either party to know the account details of the other.

A bank generates a VPA for its customers when they link their account to a UPI-enabled app.

What IMPS initiated, UPI has not just replicated but magnified to staggering proportions.

Look at the numbers. In April 2025, UPI recorded 17,893.42 million transactions. In May, that number climbed to 18,677.46 million-a 4.4% increase in just a month. IMPS, by contrast, increased from 449.25 million to 463.66 million, representing a rise of around 3.2%. IMPS now accounts for 3.6% of India's digital transactions volume; UPI rules with 79.6%. UPI offers the simplicity of mobile-based payments, is mostly free, and is increasingly global. IMPS requires the payer to register the recipient’s bank account number and IFSC code, which makes it more secure but less convenient.