InstaPay Interview with Faster Payments Scheme

Mark McMurtrie, Editor of InstaPay, recently spoke with Mike Banyard, Head of Development at the UK’s Faster Payments Scheme. ​

Q: How has the UK FPS changed since its launch back in 2008? 
Instant payments in 2008 was seen as a bit of a novelty, with most of the use being consumer-driven. Now it has been adopted by every flavour of user you can imagine – insurance companies paying claims quickly (to help customers get their lives back on track), DWP (Government) paying emergency benefit claims, some retailers moving to ‘just in time’ stock management (facilitated by Faster Payments giving guaranteed funds instantly), and on the rare occasions that a payment doesn’t happen instantly, consumers notice.

Q: What has been the maximum transaction values allowed?
At the launch of the faster payments service the limit was initially set at £10,000. This was increased to £100,000 in September 2010 and then in October 2015 further increased to today’s limit of £250,000. Discussions are currently underway to allow in the second half of 2017 £1 million to be transferred instantly. These are the limits set by FPS and it should be noted that each participant can set their own maximum values.

Q: How fast are the UK faster payment transactions?
The scheme rules dictate that each transaction must be completed in less than 15 seconds. The reality however is that transactions are typically completed in less than one second.

Q: When do you see transaction peaks?
For single immediate payments we see a very predictable pattern for peak transaction volumes. For the initial years of operation this was between 08:30 to 10:00 on weekdays to coincide with when an individual arrived at their place of work. More recently however we have seen the peak starting earlier in the morning from 06:30 probably during a commute to work and from a mobile device. There is then a flurry of activity over the lunchtime period, followed by a further peak between 18:00 and 20:00 when people return home. The Saturday peak is between 10:00 and 11:00 and Sunday between 20:00 and 21:00. The bulk of forward dated payments happen between 07:00 and 09:00. One third of all standing order payments are processed on the first business day of the month between 02:00 and 06:00.

Q: What are your key priorities? 
We have three main areas:

  1. Increasing direct access to the service.  For the 1st 8 years of operation, we had a static number of participants.  2 years ago we set out to address the challenges associated with direct participation and have seen 2 new participant banks join since the summer of 2016, and there is a pipeline of 8 looking to join in 2017.
  2. Operating a safe and secure system; integrity of the service is at the core of all that we do – as a systemically important payment system it is vital that it operates effectively
  3. Increasing engagement with service users.  Historically much of this has been filtered through our participants, but we now speak directly to all sectors to understand what else they want from the payments industry.  This helps us in prioritising developments, ensuring we remain relevant and providing products and services for the greater good of our users. We believe that opening a real dialogue with consumers, businesses, challengers and other stakeholders will further boost competition in the industry and drive innovative solutions that will improve end-users payments experience.

Q: What role do you see overlay services playing? Which services are being considered? 
To read Mike’s answer and for the full article, please click here.