10 years of Faster Payments

This Sunday, May 27th, marks 10 years since the introduction of the Faster Payments Service – an initiative that aimed to reduce the length of time it takes to transfer money between accounts from the BACS standard three working days to a matter of seconds.

At the time of its introduction, 10 participants – nine banks and one building society – became involved with the service. As of 2018, there are now 21 participants registered with Faster Payments, gradually doing away with slow, unwieldy transfers and replacing them with the immediacy that the current generation have come to expect in their financial lives.

What does the industry think about it, ten years on? How far have we come, and how far do we have to go? PaymentEye asked the experts.

 

Craig Ramsey, Vice President and Head of Real-Time Payments, ACI Worldwide:

“Ten years ago, the launch of UK Faster Payments marked the start of a revolution in how we pay and conduct our financial affairs. Millions of UK consumers now take for granted to bank 24/7, safe in the knowledge that their money will reach the recipient within seconds.

“The next stage of the real-time revolution is now here and is already happening all around us. Real-time payments will be the key enabler and backbone in a new eCommerce world dominated by the rapid growth of the Internet of Things (IoT). As more devices and entire platforms connect to the Internet, they will become conduits for commerce transactions and will require real-time payments capabilities.

“Imagine a world where you allow your car to book itself in and pay for its own service, or where Alexa reminds you to pay your phone bill which you authorise with your voice. Real-time payments are the only option in an increasingly interconnected world.”

“For banks, retailers and other payment service providers today’s challenge is building a modern and fit-for-purpose solution to bridge the opportunities of tomorrow’s payments landscape. By failing to adapt to a real-time environment, they risk losing not only payment volumes, but ultimately the business and confidence of their customers.”

 

Andrea Dunlop, CEO Card Solutions & Acquiring, Paysafe:

“The Faster Payments network has been one of the unsung heroes of the payments ecosystem in the decade it has existed. It has changed the game for consumer expectations, and in fact, merchants and consumers have moved beyond being impressed by real-time payments to demanding it.

For PSPs (Payment Service Providers), speed of payments has become an increasingly important factor when developing new products, alongside security and cost. In addition to the development of the Faster Payments network itself, the market has seen PSPs develop evolutionary products which have benefitted both merchants and consumers that are dependent on the Faster Payments Network to function. This trend will only continue with the introduction of open banking and increased customer expectations over the next decade.

As real time payments evolve into other geographical markets, such as the US and SEPA, we will see improved customer experience for cross-border payments, negating any issues around shifting exchange rates while money is transferred globally, among others.

It will certainly be interesting to watch how real-time payments shape the next ten years and its impact on businesses and consumers globally. If the pace of change we’ve seen since Faster Payments launched ten years ago is anything to go by, we’ll continue to see some significant progression.”

 

John Hutton, Director of Payments, Nationwide Building Society:

“Speed and convenience are increasingly important for our customers. Whether it is friends splitting a bill or a small business paying a supplier, instant payment processing means our customers are able to bank anytime and anywhere they like, which means they have better control over their finances.

“Faster payments have made a huge difference to the lives of our customers and the number of faster payments transactions has risen steadily year on year.

“Since the UK Faster Payments Service was launched in 2008, it has become firmly entrenched in our country’s payments ecosystem. Today we are seeing a push for real-time payment schemes across the world. We believe the real-time expansion will enable us to offer even more new and innovative services to our customers, such us instant cross-border payments or ‘Request to pay’ capabilities in the near future.”

 

What do you think? Let us know your thoughts by tweeting us @PaymentEye.

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