Meet the world leading organisation that you probably haven’t heard of

It wasn’t so long ago that almost everyone was scribbling down their details on a cheque to make a payment. And it was only recently you had to wait days for your payment to clear. A lot has changed since then. Our parents suffered the inconvenience of prolonged payment processes but times have changed and we don’t have to. But do you know why?

I’m a University student, and before a brief stint working at Faster Payments this summer, I had little idea of them either.

Every single one of us has probably made a Faster Payment at some point in our lives, yet most of us aren’t even aware that we’ve done so.

Faster Payments is the service that allows us to transfer money to another account in ‘real-time’, meaning instantly. So, when you log into your mobile or internet banking to pay your mate back for buying you that McDonald’s last night, it’s not your bank that moves your money, it’s Faster Payments.

You’ve probably heard of the older, established payment methods like BACS or CHAPS. Faster Payments’ identity however has been somewhat obscured as many banks and building societies don’t let you know when you’re using the service (despite the majority of banks and building societies in the UK utilising the service). This doesn’t mean that what Faster Payments do is in any way subordinate in the processing of payments. There is no other organisation in the world that can boast to be able to make real time payments on such a large scale as the UK based system. It’s for this reason that they deserve recognition.

We’re living in a world now where, for a large proportion of the population, cashless payments have overtaken the use of notes and coins. 

As we all know, making a cashless payment has become painlessly simple. Tapping your card on the terminal is much less hassle than fumbling around in your pockets for enough change. And for a payment, typing in a sort code and an account number is easier than handing over a wad of notes or writing a cheque. 

Say you’re short on money. You’re meant to be going home this weekend. Your parents can’t pick you up and you’re meant to be getting the train. Your parents have agreed to loan you money for your ticket (after a brief scolding and rant about how you’re not looking after your money). Without Faster Payments, the money they send you for the ticket would take 3-4 days to get into your account, in the meantime the ticket prices may have gone up or you may have even missed your chance to get home. Luckily in the UK we do have Faster Payments and they are continually looking at ways to enhance our payment experience.

For instance, the adaptable nature of the service supports further innovation and encourages continual improvement in the way we pay. You’ve probably noticed Paym on your mobile banking app.  Well Paym is an overlay service of Faster Payments and with it you can make a Faster Payment via mobile. It allows anybody with a banking app to send and receive money using only a phone number (providing they’ve previously registered online). The service makes it possible to transfer money in the time it takes you to choose the contact from your address book.

Although these services have led us to become accustomed to this rate of speed in our payment experience, we should remember that it is a luxury. The UK is one of a few places in the world is capable of these speeds. America for example has no equivalent scheme (a similar service is still in the development stage) despite the Faster Payments service being launched in 2008 in the UK. So if you bought something at exactly the same time as somebody bought something in the US, it would leave your account and update your balance in seconds, 3-4 days quicker than theirs.

This is a major advantage. We don’t have to try and work out what we’ve paid for in the last few days in order to get a better idea of our balance. We students need to know exactly how much money we have.  Down to the last penny. Those extra few pounds could be the difference between a night out and lights out by 11pm, listening to your friends stumble out of the kitchen and into the taxi outside without you. Or maybe you need all your housemates to transfer you money ASAP for that Wi-Fi bill you regrettably put in your name. Faster Payments means you’re not out of pocket for most of the week whilst funds meander their way over to you.

 

The Future

On the topic of awaiting payments from friends, there’s an initiative on the horizon that could solve a frustrating problem students face in receiving payments. Everyone’s got that one stingy friend that takes an age to cough up. The one that begins to make you feel guilty for continually asking for the money they owe you. Well there may be a solution in the pipeline. The industry is currently looking to develop a ‘Request to Pay’ initiative, and Faster Payments is one of the organisations doing the research into the ‘request’ aspect of it.  The idea is that you are able to request to be paid by whoever owes you money by sending a notification to their phone. All they have to do is merely click ‘submit’ for funds to be credited into your account. So that certain friend will have no excuse to not pay you back as a reminder can be sent directly to their phone and it would be no hassle at all to accept the payment.
The initiative would also make bill payments easier, the biller can send you a request and you can pay immediately on your phone with just a click. 

Faster Payments already has a large bearing on how you pay, and is continuing to do so. Therefore it’s important for you to know what they do and how it affects you. If you have any questions or comments regarding their service, you can leave feedback by emailing development@fasterpayments.org.uk.

Source: https://www.bba.org.uk/