What is a faster payment?

Faster Payments is an initiative introduced in 2008 and operated by payments authority Pay UK. It allows funds to be transferred rapidly and securely between UK bank accounts at any time. 

Faster Payments offers many benefits for businesses, including unparalleled speed, price and convenience when compared with other payment types. In this blog, we’ll address the most frequently asked questions about Faster Payments, and delve deeper into how businesses can use them to save time and money.  

  • How do Faster Payments work?
  • How can businesses benefit from Faster Payments?
  • What types of businesses can use Faster Payments?
  • Are Faster Payments free?
  • How long do Faster Payments take?
  • Do Faster Payments have a transaction limit?
  • Can Faster Payments be reversed?
  • Which banks use Faster Payments?
  • Faster Payments vs Bacs vs CHAPS
  • How to get started with Faster Payments
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    How do Faster Payments work?

    Businesses can make Faster Payments in several ways, including via mobile banking, internet banking, telephone banking, in-branch and by using international business payments platforms. Faster Payments work in the same way for both businesses and consumers. The steps involved when using a payment platform are:

    1. Instruct your business’s Faster Payments provider to make a payment to your chosen beneficiary.
    2. Verify your business’s identity, typically with a password.
    3. Provide your beneficiary’s sort code and account number.
    4. Your Faster Payments provider will check you have sufficient funds in your account.
    5. The Faster Payments Service (FPS) then shares the payment details with the receiving bank or platform.
    6. The receiving platform then verifies the details and, provided all is in order, accepts the payment.
    7. The funds are then transferred, all within seconds, and both parties are notified.

    By acting as an intermediary, the FPS enables different financial systems to work together quickly and effectively. Rather than each bank or platform having to make new fast money transfer agreements with each other, they can simply use the Faster Payments system. 

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    How can businesses benefit from Faster Payments?

    Faster Payments help businesses by providing a quicker and more convenient solution for moving money. The scheme’s primary goal is to reduce the time – from initiation to receipt of the funds – that it takes to complete a payment. We cover exactly how long Faster Payments take here. 

    As well as speed, Faster Payments provide simplicity. All that a person or business needs to complete a transfer are the account number and sort code of the payee, and a reference to help with identification. Faster Payments are available 24/7, and end-to-end encryption and automation mean that no payment information is at risk during the process. 

    Businesses notice the real impact of Faster Payments in areas where payment to an external party is required. The Faster Payments Service helps companies simplify their payroll, pay suppliers faster, get paid by other companies faster and settle accounts quicker. 

    Take, for instance, a doughnut delivery start-up that receives orders and payments until the very last day of the month. Because it’s a start-up, cash flow is always tight, and they count on every sale to be able to pay suppliers – or in this case, its flour supplier. With Faster Payments, the company can wait until it has received all its monthly income and then pay its flour supplier immediately and on time. Older payment solutions, such as Bacs (the Bankers’ Automated Clearing System) or CHAPS (the Clearing House Automated Payment System), could take several days between the start-up issuing the payment and the supplier actually receiving it. 

    We work with payment specialist HomeSend to enable their domestic business customers to send money to UK bank accounts in real-time. Being part of the UK’s Faster Payments Scheme, we can provide businesses with instant, cost-effective, and API-driven payments with the personal service and transparency on fees so often lacking in traditional banks. 

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    What types of businesses can use Faster Payments? 

    Any UK business requiring domestic disbursement of funds (and international companies looking to send money within the UK) can use Faster Payments.

    Potential Faster Payments users range from cross-border payment companies looking to process payments using the local method, to payroll clients looking for better transfer options opposed to the traditional (aka slow) Bacs option.

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    Are Faster Payments free?

    No, there are fees involved in using Faster Payments for businesses which range from £0.50 to £5 when made online. The fee is different for each business and depends on different factors such as industry and volume of payments. 

    Faster Payments is a non-profit, so every participant of the scheme, whether a bank like NatWest or a non-bank like Equals Money, is charged the same fee. Because of this, companies like us can offer very competitive rates to customers. 

    Unlike the banks however, with Equals Money you’ll get your own dedicated account manager to understand your business needs and offer real, human support when you need it. 

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    How long do Faster Payments take?

    Faster Payments take a matter of seconds. Provided the beneficiary’s bank is also a direct participant of the Faster Payments Scheme, the money will be received almost instantly. In very rare cases, Faster Payments may take up to two hours. 

    Faster Payments are processed 24 hours a day, 365 days a year.

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    Do Faster Payments have a transaction limit? 

    Faster Payments have an individual transaction limit of £250,000. 

    Direct participants in the Faster Payments Scheme can set their own limits, so depending on your provider, your transaction limit could be lower. 

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    Can Faster Payments be reversed?

    No, Faster Payments cannot be reversed or cancelled. 

    Once you have confirmed the funds that you want to send, the command to transfer them is processed instantly and therefore cannot be recalled. 

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    Which banks use Faster Payments?

    The Faster Payments Scheme states that 99.99% of UK bank accounts can accept Faster Payments. Non-bank payment platforms, such as ours, can also use the scheme. 

    Traditional banks are not renowned for their customer service, and companies relying on them often have to put up with long-winded processes and a lack of attention to detail. Equals Money offers the same payment capabilities as banks, while also providing a dedicated account manager, a simple onboarding process and transparent fees.

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    Faster Payments vs Bacs vs CHAPS

    The other common ways of transferring money are Bacs and CHAPS

    How do they all stack-up? 

    What is a Faster Payment? A table comparing the key features of Faster Payments, CHAPS and Bacs
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    How to get started with Faster Payments 

    Getting started with Faster Payments is simple. 

  • Get in touch with our team, and they will create a tailored implementation plan and carry out compliance checks.
  • Connect to the Faster Payments network via our API.
  • Start making payments.
  • Manage your account 24/7 through our online platform, where you can view all your payments and get real-time notifications.
  • Here to help

    If you’re interested in making faster business payments with Equals Money and want to know more about what you’ll be able to offer your clients, get in touch. Our team of currency experts are on-hand to walk you through it all.

    Email us today at: fasterpayments@equalsmoney.com 

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    Jeremy Thomson-Cook

    Jeremy Thomson-Cook

    Jeremy has over 13 years experience working in the FX industry. As a specialist in political risk mitigation and currency hedging, he regularly advises clients on the day-to-day moves of the markets and the implications of fiscal and monetary policy on international businesses.