Faster payments service launching Tuesday 27th May

The final week of testing has been completed prior to the launch of the Faster Payments scheme and consumer advice has been issued.

The Faster Payments Service, which includes standing orders, is the banking industry’s response to Government concern that the UK did not have a low cost, quick and efficient electronic payment mechanism.

With just a few days to go until the launch of the new scheme, APACS, the UK payments association, has issued new materials to help customers wishing to benefit from the service, as it begins its rollout on 27th May.

APACS has produced a new, downloadable advice guide, How to use the Faster Payments Service, along with an online easy-to-use sort code checker www.canipayfaster.co.uk. Customers can input any UK sort code to check whether it is able to receive Faster Payments.

Paul Smee, APACS chief executive said: “The final part of this enormously complex project has been to test the new system in a live environment. This week hundreds of penny payments have successfully been made between the participating banks. The Service is now ready to start being rolled out to customers next Tuesday.

“Although the initial rollout will be gradual, and some customers may not be using the new service immediately, we expect that in the coming months this will ramp up to enable large numbers of customers to benefit from it. After such substantial investment by the industry we’d like, in time, to see the new Faster Payments Service being used for all of the UK’s internet, phone and standing order payments.”

Stephen Ley, a partner in Deloitte’s Enterprise Risk Services practice specialising in payments and retail banking said: “The Faster Payment system will be a challenge for banks which could lead to increased risk of fraud as it will be harder for banks to detect and block fraud in the time window available. The existing process relies, in part, on banks having sufficient time to detect suspicious transactions.

“A number of banks have opted to issue card readers which work with their customers’ debit card to create a more secure authentication and authorisation process. With over 20 million customers regularly using internet banking, increasing online safety is clearly a priority.”

When Faster Payments goes live transactions will be limited to £10,000 for immediate payments and £100,000 for standing orders, although some banks may choose lower limits. In time it is expected that these limits will be increased.