IMPS vs. NEFT: What are the Differences Merchants Should Know?

For Indian B2B online merchants, especially in sectors like travel, hospitality, or wholesale distribution, staying limited to basic payment options isn’t enough.

Payment methods like IMPS and NEFT can help you collect large payments and process bulk transactions from business partners like travel agents, distributors, and corporate clients. These established banking channels offer security, reliability, and appropriate transaction limits that better accommodate B2B financial workflows.

But if you aren’t well-versed in the differences between the payment modes, you won’t know which one to use and when. Read on to understand IMPS vs. NEFT and learn which mode works best.

Content Index

Understanding IMPS and NEFT

IMPS (Immediate Payment Service) is a real-time payment service that facilitates instant fund transfers between accounts. For B2B online merchants, IMPS offers critical operational advantages through its 24/7 availability and immediate settlement. This payment method efficiently handles transaction volumes ranging from ₹50,000 to ₹5 lakhs, making it particularly valuable for processing urgent payments from business partners.

Travel merchants, for instance, typically process 50-100 IMPS transactions daily during peak booking seasons, with average transaction sizes of ₹75,000 to ₹2 lakhs from their network of travel agents. The instantaneous nature of IMPS allows these merchants to confirm bookings and secure inventory immediately upon payment receipt.

NEFT (National Electronic Funds Transfer), on the other hand, operates on a batch processing system that settles transactions in half-hourly intervals. While slightly slower than IMPS, NEFT excels at handling high-value transactions with no maximum limit—a crucial feature for B2B merchants who routinely process payments exceeding ₹5 lakhs.

B2B wholesale platforms frequently process 20-30 NEFT transactions daily, with average values between ₹5-20 lakhs from distributors and retail partners. Manufacturing suppliers often see monthly NEFT transaction volumes of ₹1-5 crores spread across 50-100 business clients, demonstrating the system’s capacity to handle substantial B2B payment flows.

Both systems provide structured transaction records and reliable settlement processes essential for B2B accounting reconciliation, offering significant advantages over consumer-focused payment methods for business-to-business operations.

Detailed Comparison: IMPS vs. NEFT

Both IMPS and NEFT are widely used in India. Going by numbers, 462 million (₹6.01 lakh crore) IMPS transactions were recorded in March 2025.

Similarly, the NEFT system’s transaction volume has grown by 700 percent in the past decade. In March 2025, over 9 million transactions were recorded on 29th February alone.

Here’s a quick IMPS vs. NEFT comparison to help you understand and choose the best payment method for your business.

Transaction speed and availability

Both IMPS and NEFT payment modes are available 24×7. However, both services process transactions differently. IMPS operates in real time, transferring funds to the receiver’s account within a few minutes. On the other hand, NEFT takes around two hours to complete the transfer as the settlements occur in half-hourly batches.

Transfer Limits

While IMPS and NEFT don’t have minimum limits, IMPS transactions are capped at ₹2 lakhs to ₹5 lakhs, depending on the bank. NEFT doesn’t have a maximum transaction limit imposed by the RBI. However, individual banks may set an upper limit for operational and security purposes.

Transaction charges

IMPS charges vary by bank, generally ranging between ₹2.50 and ₹25, including GST per transaction.

For example, Punjab National Bank (PNB) charges ₹5 + GST through internet/mobile banking and ₹6 + GST through branches for transactions within ₹1001 to 1 lakh. For transfers above 1 lakh, it charges ₹10 + GST through internet/mobile banking and ₹12 + GST through branches.

NEFT done online is generally free as per RBI guidelines. However, charges may apply for NEFT transactions done through bank branches. For instance, HDFC charges ₹2 + GST for transactions up to 1 lakh and ₹10 + GST for transactions above 1 lakh.

Use cases

IMPS is best suited for time-sensitive payments such as urgent vendor payments or last-minute bill settlements. It can also be used for instant customer refunds of small and medium amounts.

NEFT, on the other hand, is suitable for high-value transactions at lower charges. You can use it for batch payments to multiple vendors or recurring supplier/staff payments. It is a cost-efficient option for bulk transactions. However, in cases of failed NEFT transactions, refunds may take longer.

For example, we found X threads indicating that companies like Swiggy and Indigo use NEFT for customer refunds, which usually take 7-10 days.

Integration with eCommerce Platforms

The most convenient way to integrate IMPS and NEFT is through payment gateway partners. All you need to do is:

Choose a payment gateway that supports NEFT and IMPS
Sign up, access, and test credentials from the dashboard
Share necessary documents
Test the integration and go live

You can also consider direct bank integration, meaning connecting to banking APIs for IMPS and NEFT processing. This method requires banking partnerships and compliance with financial regulations.

Integrating IMPS and NEFT into your online stores will enhance payment flexibility, catering to customer preferences. It will help gain customer trust, especially those who perceive bank-based transfers as more secure. Plus, IMPS and NEFT have fewer technical failures compared to cards. As per a September 2024 survey report, 23% of consumers experienced at least one decline in August 2024. That’s why customers often prefer NEFT and IMPS for high-value transactions.

Security Measures

Both IMPS and NEFT are equally secure as they are governed by the NPCI (National Payments Corporation of India) and the RBI, respectively.

IMPS secures fund transfers by implementing OTPs and two-factor authentication. It employs protocols like SSL and TLS to ensure data confidentiality. Similarly, NEFT transactions are end-to-end encrypted and have multi-level authentication, typically involving OTPs and transaction passwords.

Despite the high-level security, here are a few tips to ensure secure payment processing.:

Choose a compliant payment gateway
Keep software and apps updated with the latest security features
Use strong passwords—a combination of uppercase and lowercase letters, symbols, and numbers
Secure your Wi-Fi connection and avoid using public networks
Do not share OTPs when making vendor payments

Comparing IMPS and NEFT with Other Payment Methods

Unlike NEFT and IMPS, the RTGS (Real-Time Gross Settlement) system is meant explicitly for large-value transactions.

It has a minimum limit of ₹2 lakhs and no upper limit. The transfers happen in real time like IMPS, and no charges are levied for online RTGS transfers (offline transfers have extra charges). It is also operational 24/7. So, if you want to make urgent transactions over ₹2 lakhs, RTGS is the most secure option.

For instance, RTGS best suits high-end product/service sellers like jewellery or electronics. It is also suitable for quick, high-value vendor settlements.

UPI (Unified Payments Interface) is currently dominating the digital payments system. UPI payments grew from 34% in 2019 to 83% in 2024, with an impressive CAGR of 74% in five years.

That’s because UPI is a real-time payment system. It is free of charge and available 24/7. However, UPI transfers have a maximum limit of ₹1 Lakh per day, making it one of the most convenient payment options for small to medium transactions.

For example, UPI payments are best during high-traffic shopping events, flash sales, or limited-time offers, as they allow instant payment verification and order processing.

Conclusion

While IMPS and NEFT are critical payment modes for online merchants, the main difference is their timing. IMPS is best for making instant payments within ₹2 lakhs, whereas NEFT is ideal for high-value, non-urgent transactions. Therefore, choose the payment mode depending on the nature of your transactions. Instant settlements? Choose IMPS. Payment to multiple vendors? Choose NEFT. You can make the most of both payment modes at the right time.

FAQs

Which is better, NEFT or IMPS?

IMPS is better for urgent transactions up to ₹5 lakhs, while NEFT is ideal for non-urgent, high-value payments without maximum limits.

What are the disadvantages of IMPS transfer?

IMPS has maximum transaction limits (₹2-5 lakhs) and incurs charges ranging from ₹2.50 to ₹25 per transaction.

Is NEFT free or chargeable?

NEFT is free for online transactions but has nominal charges for offline/branch transactions.