Key takeaways
- The Faster Payments Service was introduced in the UK in 2008 and operates 24/7, 365 days a year, with near-instant settlement.
- It is operated by Pay.UK and has a maximum of £1 million per payment, which can vary by bank.
- Faster Payments are typically free for consumers and cost £0.50 or more for businesses.
- Once a payment is sent it cannot be canceled, but banks follow the Credit Payment Recovery process when a payment goes wrong.
Introduction to Faster Payments
The Faster Payments Service (FPS), commonly referred to as Faster Payments was introduced in the UK in 2008. It is arguably one of the most successful attempts to offer real-time bank payments at scale. Faster Payments offers major gains in speed and convenience compared to traditional bank transfer methods such as Bacs Direct Credit and it operates 24/7, 365 days a year.
To learn more about Faster Payments and other UK payment schemes, read our in-depth guide to UK bank payments.
- Year introduced: 2008
- Operated by: Pay.UK
- Maximum amount: £1 million per payment (may vary by bank)
- Availability: 24/7, 365 days a year
- Settlement: Near-instant
- Fee per payment: Typically free for consumers, £0.50+ for businesses
How Faster Payments works
FPS facilitates real-time payments primarily through online and mobile banking up to a maximum amount of £1 million (this limit can vary from bank to bank). It’s available to anyone in the UK with a bank account and all major UK banks participate in the scheme. It’s readily accessible through a broad network of traditional banks, fintech firms, and other PSPs that connect either directly or indirectly to the central infrastructure.
Due to the real-time nature of Faster Payments, once a payment is sent it cannot be canceled. However, banks and building societies nevertheless adhere to the industry-wide Credit Payment Recovery process which provides support when a payment is sent in error.
Benefits and drawbacks of Faster Payments
Faster Payments is the quickest way to send and receive payments in the UK and offers real-time settlement 24/7. The fees for using Faster Payments are relatively low compared to card-based payment methods. The scheme also boasts increased security with transactions protected by encryption and two-factor authentication.
However, the maximum amount limit of £1 million per transaction means that Faster Payments is unsuitable for some business-to-business and high-value use cases. Additionally, not all UK banks are direct participants of the scheme yet.
