Faster Payments Service passes the £200m mark
APACS, the UK payments association, has announced that within the first three days of operation the new Faster Payments Service (FPS) processed 318,405 faster payments to a value of £200,127,682.03. This equates to around 90,000 payments a day, 3,750 payments an hour – one every second – with an average value of over £625 per payment. The FPS, which went live on 27 May, enables banks to process one-off payments made over the Internet or by phone within hours, not days, benefiting customers by speeding up the clearing of their payments. Seven banks – Barclays, Citi, Clydesdale and Yorkshire Banks (National Australia Group), HSBC, Lloyds TSB, Northern Bank (Danske Bank) and Royal Bank of Scotland Group (including NatWest and Ulster) – are now sending and receiving phone and Internet payments, and Alliance & Leicester, HBOS, Nationwide Building Society and Northern Rock are receiving these payments. Abbey and the Co-operative Bank have not yet phased in the service. The thirteen founding member banks, which together account for over 97% of all payments made in the UK, have planned a phased approach to implement the facility to send or receive payments processed through the new system, which was developed by UK payments infrastructure provider VocaLink. APACS expects another two banks to come on-stream within the next six weeks to three months. By the end of the year the majority of the UK’s Internet, phone and standing order payments are expected to be made using the new system. Any payment that is not processed through the new service will continue to be made using the existing Bacs three-day service. There is a maximum limit placed on the value of each payment sent through the FPS, with the maximum value for Internet and phone payments set at £10,000 and standing orders at £100,000. As part of the phased rollout, some financial institutions are placing lower initial limits on the value of payments that can be sent. Driven by personal client online banking demands, the FPS is currently of limited use to corporates because of the maximum limit. As a spokesperson from the National Australia Group pointed out, a significant number of corporate payments would not be covered by the framework, which is one of the reasons why the bank has not rolled the service out to its corporate clients at the present. Sandra Quinn, director of communications at APACS, said that although the upper limit will change in the future, she does not expect it to happen within the first year of operations. But, she argued, banks are already beginning to raise awareness about the service among their corporate clients. “I have already seen letters that some individual banks have been sending out to their business customers and their corporates,” said Quinn. “For most of the [FPS] members, their target was to roll out the new service to themselves, and then they will target their own financial customers, the large corporates, to make sure they have access as well. There is no doubt that corporates will gain access – because if you are a large firm the ability to move money around and get it back quickly puts a whole new complexion on how you manage your finances. If you are a small business who has difficulty getting payments paid, which most small business do, obviously a service that is simple and accessible has a potentially revolutionary capacity.” She added that another big difference between FPS and the payments services that have come before is that it will operate 24/7, 365 days per year, so that corporates can benefit from receiving their money on the weekend.