What are Faster Payments?

what are faster payments

Wednesday, 8 December 2021, 2 minute read

If you regularly make bank transfers below the value of £1,000,000, then you’ve most definitely used Faster Payments (FPS). The company itself was developed to improve the bank transfer time on low-value transactions official launch in 2008, they’ve dramatically enhanced how we transfer funds to and from UK bank accounts. In most cases, payments below their maximum value are transferred instantly, if not within a few hours. It’s infrequent that payments processed by Faster Payments take longer than one day.  

What type of bank transfers can be made with Faster Payments?  

Faster Payments services provide four payment options called single immediate, forward dated, standing orders, and direct corporate access payments. Each has its purpose, and here’s what you need to know about them:   

Single immediate payments

The most common payment service processed by Faster Payments is a single immediate payment. These are also referred to as one-off payments. Typically, these are executed through mobile, online, or in-branch banking. Payments of this type can be sent 24/7, instantly, with a limit of £1,000,000.  

Forward-dated payments

For those that want to set up singular prearranged payments would use the forward-dated option. With this service, you can select a specific date to transfer the funds. Once this date comes, the money will automatically be withdrawn from your account and deposited into the other bank account.  

Standing orders

These payments can also be known as “subscriptions”. With standing orders, you’ll set the total amount, how often you’d like to transfer funds (daily, weekly, monthly), along what day you’d like the funds to be withdrawn from your account.  

Direct corporate access payments

Lastly is direct corporate access payments, and businesses commonly use these. It allows them to directly upload payment details of customers to Faster Payments in bulk. Afterwards, Faster Payments can process these all at once, instead of individually.  

How do Faster Payments compare to other transferring methods?  

In the United Kingdom, there are three primary types of transferring methods: Faster Payments, BACS, and CHAPS, but how do Faster Payments compare to these?  

BACS is another commonly used transferring method in the UK. However, this is mainly used by organisations handling both direct debit and credit payments. Although it’s superb for this particular usage, it takes around three working days to clear the funds. Therefore, using Faster Payments is a much more efficient way of transferring money to and from UK bank accounts.  

Read our article about BACS

CHAPS is also used a lot in the UK, but its primary purpose is for transfers over £1,000,000. By using CHAPS for this type of payment, funds can be transferred on the same day. But you’ll typically undergo a £25 fee (Some banks don’t charge this if you’re considered a “premium” customer), which is unlike Faster Payments because it’s 100% free.

Read our article about CHAPS

Faster Payments are the best method for transferring low-value funds to UK bank accounts. However, this doesn’t mean that CHAPS and BACS don’t have their uses within the banking world. Each provides their own benefits and undoubtedly aid our financial services. 

Crezco can help

We process account-to-account payments for free and settle them instantly. They’re more secure than card payments and we can process higher amounts, up to £1,000,000 per transaction. Find out about how Crezco works, why we’re free, and how we can help you by getting in touch.

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