May 2009

The Faster Payments Service is 1 year old

This week, the Faster Payments Service (FPS) celebrates its first birthday. Over the last 365 days the system has processed over 180,000 payments, totalling just under £70bn. Volumes have steadily grown since its inception and the first year is already being hailed as a significant step towards more efficient and speedy payments.

Further increases in transaction volumes are predicted as awareness of the system continues to grow and high street banks complete their respective rollouts to customers.

It is interesting to note that CHAPS payments have experienced a steady decline since May 2008, while FPS transactions have clearly flourished with consumers quick to embrace the new cost-effective alternative.

Although consumer banking has been transformed considerably by FPS, it remains to be seen whether or not the corporate world can be equally turned on its head. 2009 will herald the introduction of FPS for businesses as Direct Corporate Access (DCA) is piloted by Barclays in mid-year.

This exciting turn of events means that corporate payments will no longer need to be made by CHAPS; FPS will serve as a cost-effective contingency or, equally, facilitate regular use for companies wishing to make cheaper same-day payments.

FPS could well provide the solution to the many companies currently seeking to improve their cash flow, or struggling with excessive CHAPS payments.

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