Before 2008, transferring money between UK bank accounts was a slow process that took up to three days. Today, these transfers happen instantly. This transformation is thanks to the Faster Payments System (FPS), which has become one of the UK's most crucial payment infrastructures. In 2023 alone, the system processed over £3.7 trillion across 4.5 billion transactions, demonstrating its central role in UK banking.

How Faster Payments works

Faster Payments is built on infrastructure provided by Pay.UK, which connects banks and financial institutions across the country. Currently, 45 companies participate directly in the system. These direct participants can also offer indirect access to other businesses, creating a network that reaches virtually every UK bank account holder.

The system operates 24 hours a day, seven days a week, with a maximum limit of £1,000,000 per transaction. While transfers between participating banks typically happen instantly, some transactions may take up to two hours to complete. This delay can occur for various reasons, including bank infrastructure, system traffic, or specific bank cut-off times.

One important aspect of Faster Payments is that transactions are irreversible due to their instant nature. However, the UK financial system has a safety net in place: the Credit Payment Recovery process. This helps customers who've made erroneous transfers by managing the process of contacting recipients to request refunds.

Types of Faster Payments

The system supports several payment types, each designed to meet different business and consumer needs.

• Single immediate payments are the most straightforward‍—‌these are one-off transfers that process around the clock.
• Forward-dated payments offer more flexibility in payment timing. These work just like single immediate payments, but you can schedule them for a future date. This feature is particularly useful for managing utility payments, rent, or any other scheduled expenses where you want to set up the payment in advance but ensure it only processes on a specific date.
• Standing orders solve the problem of recurring payments. If you need to send the same amount to the same recipient regularly, standing orders automate this process. They run Monday to Friday, with any weekend or holiday payments automatically moving to the next working day. This predictability makes them perfect for regular business expenses or supplier payments.
• For businesses handling multiple payments, direct corporate access provides a more sophisticated solution. This service lets companies batch their payments and send them directly through FPS using accredited software providers. It uses the same file format as Bacs transactions, making it familiar to businesses already using that system, while offering the speed advantages of Faster Payments.

Consumers and businesses get increased assurances with Confirmation of Payee

In 2020, Pay.UK introduced Confirmation of Payee (CoP). Confirmation of Payee is an account name checking service that helps to prevent UK domestic payments being sent to the wrong account. CoP gives consumers and businesses greater assurance that payments are being sent to the intended recipient, helping to avoid making accidental misdirected payments, as well as providing another layer of protection against fraud and scams.

When you enter payee details, CoP checks whether the account name matches your intended recipient. The system provides clear feedback: either confirming a full match, indicating a partial match (where the name is similar but not identical), showing no match, or in some cases, indicating that verification isn't possible.

Business benefits of Faster Payments

While speed is the most obvious advantage, Faster Payments offers several other significant benefits for businesses. The system's 24/7 availability means you're never constrained by traditional banking hours. Whether you need to make an emergency payment on a Sunday evening or process your regular transactions on a bank holiday, Faster Payments keeps working.

The real-time notification system makes it easier to track your money movement. When you send or receive a payment, you know about it immediately. This transparency simplifies reconciliation and helps you maintain accurate financial records without the delays that often complicate bookkeeping.

Perhaps most importantly, the speed and reliability of Faster Payments transforms cash flow management. When you know exactly when money will move and can transfer funds instantly, you can manage your working capital more effectively. This can help reduce the need for large cash buffers and make your business more efficient.

Faster Payments with Griffin

Our bank accounts come with access to Faster Payments through our API. We've designed our integration to make it as simple as possible to embed payment capabilities into your product or service. You get instant notifications when money moves, can automate your payment processes, and verify recipient accounts with CoP.

Automated payment flows help to reduce manual work and the potential for human error. Whether you're sending one-off payments or managing regular transfers, you can build efficient, automated processes around Faster Payments and our API makes it straightforward to embed these capabilities into your product.

Ready to see how it works? Try our sandbox today, take a look at our documentation, or talk to our sales team about embedding our banking products.