What is Faster Payments and how does it work?
What is Faster Payments?
Today, consumers expect the products and services they use to be quick and easy, and payments are no exception. Faster Payments is a system designed to make sure transactions made within the UK arrive at their destination in real time and are ready to use. It’s an electronic solution that you’ve probably used before if you’ve sent a bank transfer to another UK account.
As well as being a real-time system, Faster Payments runs 24 hours a day, seven days a week. This means that whenever you need to make a transfer, you can be sure it will arrive securely and on time.
There’s a few different types of payment types within the Faster Payments system – some designed for consumers or individuals, and others with businesses in mind.
How long do Faster Payments take?
Faster Payments should arrive instantly – it’s a real-time service after all. In some cases, they could take up to two hours but on normal terms you should receive the money in a matter of minutes.
Are Faster Payments free?
Yes. Unlike processing a card payment, Faster Payments are totally free. You shouldn’t ever be charged for using this service.
How can businesses use Faster Payments?
If you run a business, you might be able to integrate solutions into your payments workflow that are connected to the Faster Payments system.
iwocaPay is an example of a solution like this. All iwocaPay transactions are processed in real time, meaning you’ll spend less time waiting to get paid and more time focused on growing your business.
Sign up to iwocaPay to make getting paid simple. The solution gives your customers up to 90 days to pay, broken down into three equal and affordable chunks. And, you’ll get paid upfront and in full as soon as they checkout through iwocaPay.
What is the Faster Payment limit?
Typically, you’ll be able to send up to £250,000 using the Faster Payments system.
That’s a rough limit though – your bank or building society may have their own rules or policies that mean you can send more or less. If you’re thinking of making a big payment, it might be best to check what your bank allows first.
Which banks offer Faster Payments?
The list of banks that offer Faster Payments is pretty long, as almost every bank in the UK does.
That’s great news for you as a consumer or business owner, as you’ll be able to send instant domestic payments, regardless of who you bank with. In the past, Faster Payments were only used by the banks. But, more recently, new connectivity options such as APIs have meant that other financial institutions can use the system too.
Can Faster Payments be recalled?
In short, no.
The downside of real-time payment systems is that the request to deliver the money is processed immediately. This means that there’s no time to contact your bank and dispute it if you sent it by accident or to the wrong person.
As usual, you should always double check all payment details before hitting send, regardless of whether it’s a Faster Payment or not. If you do make a mistake or have been a victim of fraud, your bank might be able to offer you some help but you’ll need to discuss that with them directly.
Can Faster Payments be made at the weekend and on bank holidays?
As we mentioned before, Faster Payments is a 24 hour service. This means that you can send money using it any day of the week, regardless of national or bank holidays.
What are the different types of Faster Payments?
There are four main types of payments that sit within the Faster Payments system. They are:
Single immediate paymentsThis is the most common type of Faster Payment. Once you add your payment details into the system and hit send, your transaction will be processed straight away. iwocaPay uses this type of Faster Payments, making sure your money always arrives in real time.
Forward-dated paymentsThese are set up in advance and on a specific date – a direct debit is a good example. Once that day comes, your bank will process the payment. If the day falls on a weekend, there is a chance that they won’t process it until the next working day. That’s not because Faster Payments doesn’t run 24/7, but because your bank will need to put it into the system to start the payment’s journey.
Standing ordersThis one’s similar to a forward-dated payment, but the amount and date are always fixed. They’re most commonly used to pay monthly expenses that are always the same amount, like a rent payment for a flat or commercial building. Be aware that the same working day limitations of forward-dated payments apply to standing orders too.
Direct corporate accessThis kind of Faster Payment is for businesses. It allows them to send batches of payments to the system in one go – perfect for organisations that process a lot of transactions.
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